patrick.net
An Antidote to Corporate Media
1,365,248 comments by 15,735 users - desertguy, HeadSet, stereotomy online now
What would happen is congress elimated the Mortgage Interest Dedcution?
2010 Dec 6, 12:13am 12,174 views 28 comments
Comments 1 - 7 of 28 Next » Last » Search these comments
EightBall
@
2010 Dec 6, 12:37am
If they phase it in, it'll just become another item they will use (like AMT, unemployment extensions, marriage penalty, etc) to trade in negotiations in the crappy two party system that we have. I'll gladly give you an extension of the mortgage deduction, if you'll buy me a burger on Tuesday...
TechGromit
@
2010 Dec 6, 12:42am
According to the article above they are talking about lowering the max deduction to 500k from 1 million, which would be fine and good for most of the county, but places like California would suffer the most, since most houses are over 600k to begin with.
FortWayne
@
2010 Dec 6, 12:42am
In this industry, if you remove artificial government subsidy prices go down to what people afford.
Current interest rate subsidy like this just forces people to be priced out. It's like inflation, if you give everyone $50 to buy pencils, prices will go up by $50 on pencils because prices are a function of afford ability.
zzyzzx
@
2010 Dec 6, 2:58am
I don't think that they are that stupid as to not grandfather in the deduction for existing mortgages. They would have to cut off the decution only for new mortgages or refinances.
bubblesitter
@
2010 Dec 6, 7:49am
I don’t think that they are that stupid as to not grandfather in the deduction for existing mortgages. They would have to cut off the decution only for new mortgages or refinances.
May be this could be a new Realtor strategy, "buy now or you will never be able to get tax deduction on your mortgage payment"
I believe the cut off will be a progressive manner. If the mortgage is 600k, then only the interest generated by 100k over the limit cannot be deducted. The impact will be as huge as we like to see. Of course, the million dollar mansion will see huge tax liability. However, they are rich enough to weather the additional tax or they are really over stretch.
If mortgage interest is no longer deductible, could it be write off in the capital gains?
Suppose you buy a 100K house with 0% down with a 10 years loan with 100% interest in 10 years. At the end of the 10th year you'd had paid 200K (principal + interest) but you haven't deduct a thing.
If you sell the house for 250K, what would be your capital gain? 50K or 150K?
Comments 1 - 7 of 28 Next » Last » Search these comments
http://homebuying.about.com/b/2010/11/24/congress-talks-about-eliminating-mortgage-interest-deduction.htm
If tomorrow congress eliminated the mortgage interest deduction tax write off, I predict there would be a HUGE increase in the number of foreclosures. Why? Well look at it there way, say your paying 20k in Mortgage interest a year, and you can no longer write that amount off in your taxes, that means that you will have an additional 20k of income that will be taxed, that's about $6,000 you have to cough up every year. That's enough to push many American's just barely making there payments over the edge. If they are going to eliminate the mortgage interest deduction, they should do in a phased approach, maybe over 5 years, to give people time to adjust there budgets to account for the additional taxes they will be paying.
#housing