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re: Do you think they will take away the Mortgage interest deduction?
Posted on 4/13/11 at 1:17 pm to Tiger JJ
Posted on 4/13/11 at 1:17 pm to Tiger JJ
quote:
It's amazing how geared the entire tax and regulatory apparatus is to real estate investors.
It's what K Street is all about. And, it's why we'll never get rid of the tax code, i.e., it's how politicians make their money.
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Posted on 4/13/11 at 1:17 pm to Dusty Bottoms
quote:
No, it is itemized. His point is a good one and one that has been made many times.
I don't think it's a very good point. I mean, it's nominally true, but the value of the deduction is still radically overhyped for the "typical" buyer.
Posted on 4/13/11 at 1:17 pm to Chicken
I think my "effective tax rate" will be fricked if they do. Still can't believe I waste so much money on mortgage interest.
Posted on 4/13/11 at 1:21 pm to Tiger JJ
quote:
I don't think it's a very good point. I mean, it's nominally true, but the value of the deduction is still radically overhyped for the "typical" buyer.
I see you're still pissed about being taken to the woodshed -- right Drama Queen?
Posted on 4/13/11 at 1:23 pm to Tiger JJ
Back in the day a person that borrowed to buy a vehicle could deduct the interest. That disappeared. The interest deduction shouldn't exist, nor a lot of other deductions. Why don't they just come up with significant standard deduction applied across the board instead of the convoluted system that exists? The govt should not subsidize housing purchases, either people can afford to buy or not. It's like continuing to allow borrowers to put down 3%-4% of the purchase price now when buyer skin in the game leads to less defaults absent stupid buying decisions.
Posted on 4/13/11 at 1:24 pm to Newbomb Turk
quote:
I see you're still pissed about being taken to the woodshed -- right Drama Queen?
WTF are you talking about?
I don't think it's a very valuable thing for the average homebuyer. That's my opinion.
Posted on 4/13/11 at 1:24 pm to Newbomb Turk
Posted on 4/13/11 at 1:28 pm to Tiger JJ
quote:
I don't think it's a very valuable thing for the average homebuyer.
That's my opinion.
Coming from someone who doesn't even f'ing know what the itemized deductions are .... your opinion has been "duly noted".
Posted on 4/13/11 at 1:28 pm to tirebiter
quote:
It's like continuing to allow borrowers to put down 3%-4% of the purchase price now when buyer skin in the game leads to less defaults absent stupid buying decisions.
Except that the downpayment is often also a gift from the government.
Posted on 4/13/11 at 1:29 pm to Cold Cous Cous
quote:
The impression I get is that homeowners "feel" that the mortgage interest deduction saves them a lot more money than it actually does
I ran the math once and on something like $250k at 6% the government was subsidizing $90k worth of interest over the life of the loan. I was pretty stunned at how much they were incentivizing home buying.
quote:
I always thought it was entirely off the table, but from my recent trip to The Hill, it seems like both sides are actually considering it in some form. I was shocked.
I'd be very surprised too. Isn't this the biggest middle class vote bribe they have?
Posted on 4/13/11 at 1:30 pm to Dusty Bottoms
Like the lady my CPA told me about last week that had $6600 total income in 2010 and received a $4300 "refund". He was PO'd about that one.
Posted on 4/13/11 at 1:32 pm to Tiger JJ
quote:
I don't think it's a very valuable thing for the average homebuyer.
I don't disagree. But valuable is obviously relative. The theoretical ceiling for a couple in the 25% bracket is $2,850, or a $238/month house note reduction. That isn't small change for many.
Posted on 4/13/11 at 1:33 pm to Dusty Bottoms
quote:
The theoretical ceiling for a couple in the 25% bracket is $2,850, or a $238/month house note reduction
That's higher than I expected. Can you work me through those numbers?
Posted on 4/13/11 at 1:34 pm to Gaston
quote:
I think my "effective tax rate" will be fricked if they do. Still can't believe I waste so much money on mortgage interest.
You can get there through other means. Our effective fed rate filing jointly was ~ 5.5% paying about $1000 in interest on our home prior to paying off the loan last year. And it wasn't on sub-six figure income.
Posted on 4/13/11 at 1:38 pm to tirebiter
We were 13.5% with $12k in interest. We've taken steps to adjust this, so next year will be the litmus test.
Posted on 4/13/11 at 1:46 pm to Gaston
Last year, if I only deducted my mortgage interest, I would have saved about $3K. This is due to the fact that my mortgage interest was only about $9k over my standard deduction. However, my other itemized deductions saved me another $4-5K, which I would not have been able to deduct if not for my mortgage interest because I would not have had enough to itemize.
Posted on 4/13/11 at 1:47 pm to Gaston
That is good from a historical perspective, good luck with your strategy. We all love to bitch about paying taxes, and if much of the money wasn't wasted it would lead to better attitudes. My neighbor evidently believes the country can be run for $0....it is a long running convo that goes nowhere.
Posted on 4/13/11 at 1:53 pm to Newbomb Turk
quote:
However, my other itemized deductions saved me another $4-5K, which I would not have been able to deduct if not for my mortgage interest because I would not have had enough to itemize.
By your numbers, you would have been able to deduct at least SOME of them.
Posted on 4/13/11 at 1:54 pm to Cold Cous Cous
quote:
That's higher than I expected. Can you work me through those numbers?
I'd like to see them too. Another mitigating factor is I've found that the deduction basically just offsets your property tax bill.
Posted on 4/13/11 at 1:57 pm to Tiger JJ
quote:
I've found that the deduction basically just offsets your property tax bill
so this would mean a significant increase in annual taxes to many families.....wouldnt you agree?
more taxes is pretty much always bad for budgets in times like these
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