We thought this article provided a good concise overview of the tax bill and changes for homeowners, buyers, and sellers. Check out the list below and see how the final version of the tax bill can affect you.
The post below was originally published via The Chicago Tribune
“Standard deduction: The new law increases the standard deduction to $12,000 for single filers and $24,000 for joint filers. For many homeowners it no longer makes sense to itemize deductions.
Mortgage interest deductions: The new law caps the limit on deductible mortgage debt at $750,000 for loans taken out after Dec. 14. (Loans made before that date can continue to deduct interest on mortgage debt up to $1 million.) Homeowners can refinance mortgage debts that existed before Dec. 14 up to $1 million and still deduct the interest as long as the new loan does not exceed the amount refinanced. The interest on a home-equity loan can be deducted as long as the proceeds are used to substantially improve the home. Mortgage interest on second homes can be deducted but is subject to the $750,000 limit.
State and local property taxes: The new law limits the property tax deduction to $10,000. The bill specifically precludes prepaying 2018 state and local taxes in 2017.
Capital gains exclusion: Home sellers can exclude up to $500,000 for joint filers or $250,000 for single filers for capital gains when selling a primary home as long as the homeowner has lived in the residence for two of the past five years. An earlier proposal would have increased that requirement to five out of the last eight years but it was struck down.
Deduction for casualty losses: The law restricts the deduction to only losses attributable to a presidentially declared disaster.
Moving expenses: The law eliminates the deduction except for members of the military.
Estate tax: The law doubles the estate tax exemption to $11.2 million.
Historic Tax Credit: The HTC has been used to fund renovations in more than 40,000 historic structures since 1981. The law continues to provide a 20 percent credit when the certified historic property is placed into service but the new law spreads the deduction over five years.
Low-Income Housing Tax Credit: The bill retains the 4 percent LIHTC, which funds about a third of all affordable housing construction.”