What Tax Changes Are Coming for Home Owners?

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Here’s a recap of the latest tax bill approved by Congress that effects real estate.

Last-minute changes to the bill:

  • Capital gains exclusion. In a huge win for current and prospective homeowners, current law is left in place on the capital gains exclusion of $250,000 for an individual and $500,000 for married couples on the sale of a home.
  • Mortgage interest deduction. The maximum mortgage amount for households deducting their mortgage interest has been decreased to $750,000 from the current $1 million limit.
  • State and local tax deductions. Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000.
  • Pass-through entities. The bill significantly reduces the effective rate of tax on business income earned by independent contractors and income received from pass-through entities.

Elaine Abercrombie
Broker/Owner, SBAOR Past President, GREEN, SRES
eabercrombie1951@gmail.com
www.AbercrombieFineHomes.net
805-450-0086

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