360° Coverage : Camp Tax Plan Hits Homeowners, Real Estate Industry Hard

2 Updates

Camp Tax Plan Hits Homeowners, Real Estate Industry Hard

Feb 26 2014, 7:24pm CST | by

In an effort to simplify the nation’s unwieldy tax code, Rep. Dave Camp (R-Mich.) is socking it to homeowners. His proposal as chairman of the House Ways & Means Committee, The Tax Reform Act of...

Filed under: news

 
 
 

33 weeks ago

Camp Tax Plan Hits Homeowners, Real Estate Industry Hard

Feb 26 2014, 7:24pm CST | by

In an effort to simplify the nation’s unwieldy tax code, Rep. Dave Camp (R-Mich.) is socking it to homeowners. His proposal as chairman of the House Ways & Means Committee, The Tax Reform Act of 2014, hits first-time home buyers, jumbo mortgage seekers, homeowners who have ratcheted up big gains in their primary residence, and even homeowners who are aiming to green their homes by making them more energy efficient. Of course, the proposals aren’t law – yet— but here’s where his plan would hit home. The context is streamlined individual income tax rates and an outsized standard deduction. But if you’re a homebody, you’re likely going to be paying more in taxes.

Drastic limit to mortgage interest deduction. Today you can deduct mortgage interest on up to $1.1 million in debt ($1 million in acquisition indebtedness and $100,000 in home equity debt) on a principal and second residence, but under Camp’s tax reform proposal that is reined in big time. The maximum amount of indebtedness on which you could take the mortgage interest deduction would be $875,000 in 2015, $750,000 in 2016, $625,000 in 2017 and $500,000 in 2018 and later. Interest paid on home equity indebtedness would not be deductible after 2014. Special rules apply in the case of refinancing as long as you aren’t taking out a bigger mortgage.

Tightening of exclusion of gain from sale of principal residence. Camp’s proposal tightens the rules for excluding gain from the sale of your home. Currently you can exclude $250,000 ($500,000 for a couple) of gain if you’ve owned and used the residence as your principal residence for at least two of the five years before you sell. The proposal changes the rules so that it only applies if you’ve used the residence as your principal residence for at least five of the eight years prior to the sale. It also limits the exclusion so it only applies once during any 5-year-period (up from 2 years). And it phases out the exclusion by one dollar for every dollar a taxpayer’s adjusted gross income exceeds $250,000 ($500,000 for a couple).

Repeal of real estate tax deduction. The repeal of the real estate tax deduction is another big blow to homeowners, especially those in high property tax states. Curious how your property tax bills stack up against other areas of the country? Check out this interactive tool that lets you search property tax data by county on the Tax Foundation’s web site.

Repeal of “green” home improvement credit. The credit of up to $500 for making energy-efficient home improvements like installing new windows or adding insulation in your primary residence would be repealed. The credit, one of the tax extenders that expired on Dec. 31, was good through 2013, so if you made any improvements that count last year, make sure you claim them on the 2013 tax return you’re filing now. The Alliance To Save Energy explains how here.

Repeal of “green” energy credits. The 30% off federal credit for installing solar, wind and geothermal systems to power your home currently expires Dec. 31, 2016, but it was hoped that it would be made permanent. Instead Camp’s proposal would move the expiration date up to Dec. 31, 2014. These projects take time to plan, so if you’ve been considering greening your home but delaying, you might want to act now. The federal incentive, on top of state and local incentives, make a big difference. For a comprehensive list of incentives, check out the North Carolina Solar Center’s database of state incentives for renewable & efficiency here.

Repeal of exception to 10-percent penalty for first-time home purchases. Typically you have to pay a 10% penalty (plus income tax) on any money you take out of your Individual Retirement Account before you’re 59.5 – but one of the exceptions to the penalty says that you can take up to $10,000 to buy a home under certain circumstances. Camp’s proposal eliminates the first-time home purchase penalty exception. This will make it tougher for home buyers to come up with cash for a down payment, and it could discourage IRA savings.

Repeal of deduction for personal casualty losses. If you live in a state prone to natural disasters (fires, storms, floods), the repeal of the deduction for personal casualty losses will hurt you. Instead of being able to deduct casualty losses to the extent they exceed 10% of your adjusted gross income, the deduction will be zero, starting in calendar year 2015.

Repeal of deduction for moving expenses. Thinking of moving for work? The proposal repeals the deduction for moving expenses starting in calendar year 2015.

You can read a technical explanation of Camp’s tax reform proposal by the Joint Committee on Taxation here.

See also:

The Forbes 2014 Tax Guide.

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workfo ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the do ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

'Lebanon at a high risk for Ebola'
Beirut, Oct 21 (IANS) Lebanon is at a high risk of being affected by deadly Ebola virus, which has ravaged parts of West Africa and prompted a worldwide health scare, the country's health minister said Monday.
 
 
Panel to probe EU-Russia dispute on import duties: WTO
Geneva, Oct 21 (IANS) The World Trade Organisation (WTO) Monday announced a panel will probe into the dispute between the European Union (EU) and Russia on anti-dumping duties imposed by Moscow on Light Commercial Vehicles (LCVs) from Germany and Italy.
 
 
UN to support Ghana's fight against Ebola
Accra, Oct 21 (IANS) A UN official Monday reiterated support to Ghana's preparedness to contain a possible spread of the Ebola virus disease.
 
 
India starts push at UN for International Yoga Day
United Nations, Oct 21 (IANS) India's UN Mission has started action to have June 21 declared the International Day of Yoga, following the proposal made by Prime Minister Narendra Modi while addressing the General Assembly (UNGA) last month.
 
 
 

Latest from the Network

1,074 new dengue cases in Chinese province
Beijing, Oct 18 (IANS) China's Guangdong province has reported 1,047 new cases of dengue fever, health authorities said Saturday. Six people have already died in Guangdong -- five in Guangzhou and one in adjacent...
Read more on Business Balla
 
Blake Lively 'always' wanted to be mum
Blake Lively has ''always'' wanted to be a mother. The 27-year-old actress is expecting her first child with husband Ryan Reynolds and she admits she's been dreaming of this moment since she was a youngster. Speaking...
Read more on Celebrity Balla
 
Kris Jenner 'torn apart' by Bruce's new relationship
Kris Jenner feels ''torn apart and angry'' that Bruce Jenner is dating her former assistant. The 58-year-old matriarch split from the 64-year-old Olympic gold medalist last October following 22-years of marriage but is...
Read more on Celebrity Balla
 
Cheryl Fernandez-Versini won't move to France
Cheryl Fernandez-Versini doesn't want to move to her husband's home country of France. The 'X Factor' judge, 31, who comes from Newcastle, is adamant she won't be relocating any time soon to suit her new spouse Jean-...
Read more on Celebrity Balla
 
Lance Bass sets wedding date
Lance Bass has set a date for his wedding. The former *NSYNC singer and his partner Michael Turchin, who have been dating for two-and-a-half years, are to tie the knot on December 20, 2014, a representative for the...
Read more on Celebrity Balla
 
Nepal avalanche toll reaches 39
Kathmandu, Oct 18 (IANS) At least 39 climbers died while hiking on a key Nepali route after it was hit by a major snowstorm and avalanches earlier this week, BBC reported Saturday citing officials. Over 350 stranded...
Read more on Politics Balla
 
Jake Gyllenhaal says society is complicit in 'nightcrawling'
Jake Gyllenhaal says almost everybody in society ought to relate to his new movie 'Nightcrawlers'. The eagerly-awaited film concerns those people who monitor police scanners and then race to crime scenes to film eye-...
Read more on Movie Balla
 
India eves look for first win in AFC U-16 qualifiers
Dhaka, Oct 18 (IANS) India will hope to register their first win of the 2015 Asian Football Confederation (AFC) Under-16 Women's Championship qualifiers when they take on hosts Bangladesh in a crucial encounter at the...
Read more on Sport Balla
 
Moyes mulling return to management
London, Oct 18 (IANS) Former Manchester United manager David Moyes said that he is ready to revive his managerial career six months after being sacked by the 'Red Devils'. "I am ready to return. I have enjoyed the...
Read more on Sport Balla
 
Ebola fears loom over Ghana hosting AFCON
Accra (Ghana), Oct 18 (IANS) The Ghana Medical Association (GMA) cautioned the government Saturday against hosting the 2015 African Cup of Nations (AFCON), despite a request by the Confederation of African Football (...
Read more on Sport Balla