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Posted on 4/14/11 at 11:06 am to OohPooPahDoo
quote:
the banks will have to lower the interest rates a little bit to attract the high bracket earners
the rate is not based on what people can afford, its based off the long term lending rates between banks. I don't see this having any direct effect on rates.
Posted on 4/14/11 at 11:10 am to Cold Cous Cous
quote:
Well, the MID doesn't encourage home ownership per se. It encourages having a mortgage, which isn't quite the same thing.
IMO, it's always been a handout to the following 3 groups:
homebuilders
mortgage bankers
well-off taxpayers
Posted on 4/14/11 at 3:29 pm to Tiger JJ
quote:
homebuilders mortgage bankers well-off taxpayers
I would reorder it and add:
1) Realtors-to buyer, blah blah, you will get the MID, save taxes, and other BS
2) Mortgage brokers/banks
3) The Wealthy who are going to own a nice home regardless, and
4) Homebuilders--they only get one shot at the trough per home, where the others get multiple opps
Posted on 4/14/11 at 3:31 pm to OohPooPahDoo
quote:
this wouldn't change the MID for businesses, right?
I don't think it would, but who knows for sure, the govt might limit the amount. Interest paid on mortgages used to finance rental properties is the same as financing a professional office, warehouse, etc and other business write off interest on these items + equipment.
ETA--I am not a CPA or accountant, its just an opinion and it would affect me if one could no longer claim mtg interest on rentals. If interest and depreciation were excluded it would be painful to say the least.
This post was edited on 4/14/11 at 3:34 pm
Posted on 4/14/11 at 3:52 pm to tirebiter
quote:
I don't think it would, but who knows for sure, the govt might limit the amount. Interest paid on mortgages used to finance rental properties is the same as financing a professional office, warehouse, etc and other business write off interest on these items + equipment.
ETA--I am not a CPA or accountant, its just an opinion and it would affect me if one could no longer claim mtg interest on rentals. If interest and depreciation were excluded it would be painful to say the least.
If that's the case then I think I'll be buying a duplex soon.
Posted on 4/14/11 at 4:04 pm to OohPooPahDoo
quote:
If that's the case then I think I'll be buying a duplex soon.
You might want to consult with a tax professional first. Even if tax code changed a phasing out or grandfathering exemption might be put in place.
Tax reform is extremely difficult to effect due to special interests. The state govt here in GA tried to implement a flat tax this session after having multiple consultants/iterations of the plan/bill discussed and they shelved it this week as the final impact can't be determined yet and residents were raising hell. YMMV.
Posted on 4/14/11 at 4:13 pm to tirebiter
quote:
You might want to consult with a tax professional first. Even if tax code changed a phasing out or grandfathering exemption might be put in place.
Tax reform is extremely difficult to effect due to special interests. The state govt here in GA tried to implement a flat tax this session after having multiple consultants/iterations of the plan/bill discussed and they shelved it this week as the final impact can't be determined yet and residents were raising hell. YMMV.
We were leaning toward the duplex anyway.
Basically, you're allowed to deduct
1) 1/2 of the mortgage interest (the other 1/2 might wind up deducted on your itemizations anyway though, but the 1/2 on the rental side is in addition to the standard deduction)
2) all expenses related to maintaining the other side
3) half of expenses related to maintaining the entire building
4) depreciation of half of the value of the house over several decades - with depreciation recapture on sale
5) So basically you subtract all that from the rent and that's the income from the other side - which will be lower in the early years of the loan due to most of the payments being interest.
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