Dear Friends & Neighbors,
Happy New Year! We hope everyone enjoyed the holiday season. First, we wanted to thank all of you for a busy and successful 2017. We always appreciate the loyalty and business that you provide to us. We are hoping to make 2018 another great year for all.
Second, we thought you would benefit from a recap of the final tax reform bill and how it relates to you and real estate. There were some last minute changes to the bill that include the following improvements, summarized by NAR, the National Association of Realtors:
- 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. Both the House and the Senate had sought to make it much harder to qualify for the exclusion.
- 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 on primary and secondary homes. The House bill sought a reduction to $500,000.
- State and local tax deductions. Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000. Both the House and Senate bills sought to eliminate the state and local income tax deduction altogether.
- 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.
It seems again that 2018 will be a great time to sell, and we would love to be the ones to help you do that. As always, please let us know how we can help and if you have any questions or issues we can address.