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Nikla Huff & Susie Sanchez, Realtor, SFR, SRES, e-Pro
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818-517-9340
OnTargetRealEst8@
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BY KEN HARNEY, WEDNESDAY, JANUARY 2, 2013.

Inman News®

When the month long congressional game of chicken known as the "fiscal cliff" ended late last night in the House of Representatives, housing and real estate emerged as winners on most key issues. The Senate bill that finally passed the House  extended a number of federal tax code provisions that are important to homebuyers & sellers.

Here's a quick overview of what the legislation means for housing:

The Mortgage Forgiveness Debt Relief was extended through 2013

For huge numbers of financially distressed owners of homes with underwater mortgages, this was the biggest issue in the entire fiscal cliff debate. The mortgage debt relief provisions in the tax code, first enacted in 2007, expired at midnight Dec. 31,2012.

Had Congress not acted, the tax code would have reverted to its pre-2007 treatment of mortgage principal reductions or cancellations by lenders, whether through loan modifications, short sales, deeds-in-lieu or foreclosures: All principal balances written off would be treated as ordinary income to the homeowners who received them.

Deduction of mortgage insurance premiums

The bill retroactively extended this benefit to cover all of 2012, plus continues it through 2013. Qualified borrowers who pay private mortgage insurance premiums or guarantee fees on conventional, low down payment home loans, FHA, VA and Rural Housing mortgages will be able to write off those premiums along with their mortgage interest on federal tax returns. There are limitations, however, so consult your tax professional.

Tax credits for energy-efficiency home improvements

This benefit provides modest tax credits of $200 to $500 for owners who install energy-efficient windows, insulation and other upgrades designed to cut energy consumption. The bill covers improvements made during 2012 and 2013.

Battle over mortgage interest deduction still to come...

This is an excerpt from an article written by Ken Harney for Inman News.

 

January 2, 2013. Ken Harney writes an award-winning, nationally syndicated column, "The Nation's Housing," and is the author of two books on real estate and mortgage finance.

 
Nikla Huff & Susie Sanchez, Realtor, SFR, SRES, e-Pro 
Contact Info:
Mobile: 818-384-3853
Personal FAX: 818-999-0023
Email: OnTargetRealEst8@aol.com
 
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