If I Want To Find Any Information About The New Tax Cuts And Jobs Act, I Would Go To The Website Of The National Association Of Realtors
Also known as Realtor.org. And they have a pithy article, “What It Means for Homeowners and Real Estate Professionals”. I believe that since I send this group money each year to support all their lobbyists and attorneys, I should read what these learned people present.
This article is excellent. Check it out. Read it twice and then post your comments here to help all of us.
One Point Above All: There might be some minor corrections that I have not seen, but this Act did not affect commercial property regulations. The 1986 Change destroyed many aspects of investment property. Just two items: the depreciation ratios for residential rentals were changed from 15 year, 150% declining balance to 27.5 years, straight line. AND the regs. were changed so that in most cases an owner could not deduct passive losses from their active income. Bummer.
Major Provisions Affecting Current And Prospective Homeowners
- Tax Rate Reductions: Check out your ordinary income last year against 2017 rates and then against the 2018 rates presented here.
- Exclusion of Gain on a Sale of a Principal Residence: Stays the same.
- Mortgage Interest Deduction: On new loans after 12/14/17, the limit on interest will be $750,000.00, but current loans are grandfathered. Second home interest can be deducted under the new limits.
- Deduction for State and Local Taxes: Now known as SALT taxes. Only up to $10,000.00 for single and married alike. Will this decrease marriages? That is about $3,000.00 a year for many higher earners.
- Standard Deduction: $12,000.00 for singles and $24,000.00 for married. Great for the fly-over states. Conspiracy thought: THEY want to have everyone become employees not independent contractors and everyone use the standard deduction. Will sure decrease the chance for any audits. What is there to audit?
- Other Items: The article also discusses Repeal of Personal Exemptions (ouch), Mortgage Credit Certificates, Medical Expenses, Child Credit, Student Loans, Casualty Losses, and Moving Expenses.
- Commercial Real Estate: They cover Like-Kind Exchanges (no changes to Real Estate 1031’s (YEA), Carried Interest, Cost Recovery, Private Activity Bonds, Low Income Tax Credits, Historic Tax Credits, and other items.
- Affecting Real Estate Professionals: Deduction for Qualified Business Income (this should be required reading for Real Estate Professionals, Section 179 Expensing, Entertainment, etc.
So much to consider, so little time; I can’t think about that right now. If I do, I’ll go crazy. I’ll think about that tomorrow.