re: If I rent a house why am I subsidizing your mortgage deduction

Homeowners drive the economy more so than renters so they get the tax benefit. that is the easy answer

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2) but the answer he will like better is that because without that incentive there would be a higher price on rent and fewer people buying properties for the purpose of renting them.

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Ding ding ding.

But, something tells me, it wouldn't be understood.

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I think his bigger issue is that if he rents a house and pays the market rent, and does o on a timely basis, why can he not get some sort of break in the tax code?

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Getting tax deductions for rent you pay would be ripe for widespread fraud. You'd have people claiming on taxes that they pay higher rent than they actually do so they can get a bigger tax break. Kids living rent-free at their parents house would be trying to claim they paid rent so they can get a tax deduction. Even if the IRS came up with a form for landlord to give renters, similar to the IRS form 1098 for mortgage interest that banks send you for taxes....it would be a clusterfrick because the average landlord or person that rents out a room or 2 in their house to roommates doesn't have an accountant to make sure those extra tax forms would be done properly.

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You "own" a house, you get to deduct a good portion of what you pay to the bank and therefore lowering your tax exposure

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Not if the house is paid off. So the person that owns their house free and clear doesn't get any tax break that a renter wouldn't get.

He answered it for you.


This is why you're "subsidizing my mortgage, while I subsidize what purchasing a home would cost for you"

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His situation and job makes it as such that owning would be more of a problem since he has to move with his job an average every 2.5 years

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#RentersLife4Me

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Itemized deductions won't be very common for most with the new tax laws. I've itemized for the past 7-8 years but likely won't next year

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This....

His prayers have been answered.

The loopholes are closing.

Tell him what I told my 5 year old when he asked why God made ticks:

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but this gentleman said that because he rents and he cannot deduct the rent,

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Does he pay interest in rent? Because we don't get to deduct mortgages just the interest there on.

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he is being penalized and feels that renters are subsidizing people who pay get to deduct the interest

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He contracted for the agreed upon price. Next time he can negotiate it.

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What say the OT ers to his assertion?

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The tax code has little to do with raising revenue. If all the government was concerned with was raising revenue, we would have a fair tax and move on with life.

We have these entire institutions of government, the IRS, thousands of pages of tax code, etc, because the main purpose of the tax code is SOCIAL ENGINEERING.

If you want to encourage something, allow it is a deduction. If you want to discourage something, tax it.

The federal government, and a good number of the citizens, over the years have decided that home ownership is something we should encourage. Therefore, we subsidize it.

Further, you have an entire army of occupations that benefit from said tax deductions, and an array of lobbyists that constantly remind the politicians of that.

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Also said his landlord feels very much the same way since he can't deduct on the interest on his rental properties

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Assuming the landlord subject to passive limitations, he can deduct his expenses up to his revenue. And anything that gets disallowed, he can take when he sells the rental property.