Boris Smolgovsky

Воспитаем силу воли! Кто со мной?

May your every Day of the New Year glow with good cheer, strong health and happiness! Happy New Year!!!

On December 20, 2017, Congress passed the Tax Reform Act (formerly known as the Tax Cuts and Jobs Act or the Act). With new reform comes new changes to the w...ay we do business in real estate and how we are taxed on mortgages. In this article, I would like to list these changes in the most simple way possible so that you do not need to be a certified accountant to understand them. Mortgage Deductions: The new bill reduces the limit on deductible mortgage debt to $750,000 for new mortgages taken out after December 14, 2017, on primary and second homes. Current jumbo loans up to $1 million are grandfathered in and are not subject to the new $750,000 cap. Refinancing: Homeowners can still refinance their home loans up to $1 million on December 14, 2017 and still be able to deduct the interest, as long as the new mortgage loan does not exceed the amount of the existing loan being refinanced. HELOC (Home equity line of credits): Unfortunately, home equity line of credits (HELOC) for primary homes are no longer tax deductible in 2018. Homeowners will no longer be able to deduct interest paid on home equity debt through December 20, 2025. However, if the HELOC proceeds are used to purchase or improve an investment property, the related interest paid on the HELOC is tax deductible. You will also be able to write off interest on home equity loans (or second mortgages) if a large part of the proceeds is used to improve the property. Investment Homes: Mortgage interest is tax deductible on second homes up to the $1 million $750,000 limits. For strictly investment properties, mortgage interest continues to be tax deductible without the $750k limitation. Cash taken out on investment properties continue to be tax deductible provided proceeds are used for investment properties and not personal expenses Mortgage proceeds from a refinance cash out or a HELOC used from your primary residence to purchase investment properties may be tax deductible against rental income and escape the new limitation. Deduction for State and Local Taxes: Homeowners will now be able to deduct up to $10,000 for the total of state and local property taxes and income or sales taxes which applies to both single and married filers. The bill also precludes the deduction of 2018 state and local income taxes prepaid in 2017. The IRS has just issued an Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017. The Advisory states: The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed. Capital Gains: Homeowners will continue to be able to exclude up to $500,000 profit from capital gains for a married couple and $250,000 for single people from getting taxed when they sell their home. It still remains that the homeowners would have to live in the property for two of the previous five years. 1031 exchange: People who have properly structured real property exchanges will continue to enjoy tax benefits under IRS Section 1031. In fact, the amount of cash that is tax-free has doubled to $11 million for single people and $22 million for married people. The Act modifies the IRS Section 1031 exchange provisions by limiting their application to real property that is not held primarily for sale and the portion of any 1031 exchange that includes personal property will no longer qualify for tax deductions.

Great Time for Mortgage Re-Financing or New Home PurchaseFinancing! Call me at 925-244-1099 or 925-699-1210 (cell) for a fast and no-obligation consultation.

May your every Day of the New Year glow with good cheer, strong health and happiness! Happy New Year!!!

On December 20, 2017, Congress passed the Tax Reform Act (formerly known as the Tax Cuts and Jobs Act or the Act). With new reform comes new changes to the w...ay we do business in real estate and how we are taxed on mortgages. In this article, I would like to list these changes in the most simple way possible so that you do not need to be a certified accountant to understand them. Mortgage Deductions: The new bill reduces the limit on deductible mortgage debt to $750,000 for new mortgages taken out after December 14, 2017, on primary and second homes. Current jumbo loans up to $1 million are grandfathered in and are not subject to the new $750,000 cap. Refinancing: Homeowners can still refinance their home loans up to $1 million on December 14, 2017 and still be able to deduct the interest, as long as the new mortgage loan does not exceed the amount of the existing loan being refinanced. HELOC (Home equity line of credits): Unfortunately, home equity line of credits (HELOC) for primary homes are no longer tax deductible in 2018. Homeowners will no longer be able to deduct interest paid on home equity debt through December 20, 2025. However, if the HELOC proceeds are used to purchase or improve an investment property, the related interest paid on the HELOC is tax deductible. You will also be able to write off interest on home equity loans (or second mortgages) if a large part of the proceeds is used to improve the property. Investment Homes: Mortgage interest is tax deductible on second homes up to the $1 million $750,000 limits. For strictly investment properties, mortgage interest continues to be tax deductible without the $750k limitation. Cash taken out on investment properties continue to be tax deductible provided proceeds are used for investment properties and not personal expenses Mortgage proceeds from a refinance cash out or a HELOC used from your primary residence to purchase investment properties may be tax deductible against rental income and escape the new limitation. Deduction for State and Local Taxes: Homeowners will now be able to deduct up to $10,000 for the total of state and local property taxes and income or sales taxes which applies to both single and married filers. The bill also precludes the deduction of 2018 state and local income taxes prepaid in 2017. The IRS has just issued an Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017. The Advisory states: The IRS has received a number of questions from the tax community concerning the deductibility of prepaid real property taxes. In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed. Capital Gains: Homeowners will continue to be able to exclude up to $500,000 profit from capital gains for a married couple and $250,000 for single people from getting taxed when they sell their home. It still remains that the homeowners would have to live in the property for two of the previous five years. 1031 exchange: People who have properly structured real property exchanges will continue to enjoy tax benefits under IRS Section 1031. In fact, the amount of cash that is tax-free has doubled to $11 million for single people and $22 million for married people. The Act modifies the IRS Section 1031 exchange provisions by limiting their application to real property that is not held primarily for sale and the portion of any 1031 exchange that includes personal property will no longer qualify for tax deductions.

Great Time for Mortgage Re-Financing or New Home PurchaseFinancing! Call me at 925-244-1099 or 925-699-1210 (cell) for a fast and no-obligation consultation.

Time to buy a house? 30-year fixed mortgage rates are still at lowest levels. Call Boris Smolgovsky @ 925-244-1099 / 925-699-1210 or email to [email protected] for a free and no obligation consultation. A terrorist attack in Spain and political drama in Washington continued to put downward pressure on mortgage rates this week. According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average dropped to its lowest level in nine months, falling to 3.86 percent with an average 1 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.89 percent a week ago and 3.43 percent a year ago. The 15-year fixed-rate average remained the same as it was a week ago, holding steady at 3.16 percent with an average 1 point. It was 2.74 percent a year ago. Investors are becoming increasingly wary of the political climate in Washington and tensions around the world. Those concerns have prompted them to flee toward the safe haven of government bonds. As a result, bond prices have risen and yields have fallen. The yield on the 10-year Treasury sank to 2.18 percent Wednesday, its lowest level in two months. Mortgage rates tend to follow the same path as long-term bond yields. Investors are also keeping an eye on the Jackson Hole symposium where Federal Bank chair Janet Yellen could signal how the central bank will begin unwinding its balance sheet. Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than half of the experts it surveyed say rates will remain relatively stable in the coming week. Shashank Shekhar, chief executive of Arcus Lending, is one who expects rates to hold steady.