Analysts Address Mortgage Interest Deduction at Realtor Expo

Analysts Address Mortgage Interest Deduction at Realtor Expo

first_img Share in Data While other hot-button issues have drawn national attention away from the subject of tax reform, speakers at the “”National Association of Realtors'””:http://www.realtor.org/ (NAR) “”Midyear Legislative Meetings & Trade Expo””:http://www.realtor.org/midyear.nsf/ urged industry professionals not to forget what’s at stake.[IMAGE]Speaking at a session at the expo, political commentator and analyst Jeffrey Birnbaum assessed the issues currently holding Washington’s attention (including gun control, immigration reform, and the Affordable Care Act), discussing their potential impact in the real estate world.””Although the economy appears to be slowly coming back, the Administration’s second-term agenda may have stalled,”” Birnbaum said. “”Political winds have a tendency to suddenly shift though, so no one should take current tax policies for granted. If compelled to act, Congress could move legislation quickly on tax reform.””Those reforms could bring changes to the mortgage interest tax deduction (MID), which was floated as a potential casualty in last year’s “”fiscal cliff”” negotiations. [COLUMN_BREAK]Analysts in the past have questioned the overall utility of the deduction–alarming “”industry groups””:https://themreport.com/articles/industry-professionals-call-for-preservation-of-mortgage-interest-tax-deduction-2012-12-21, who argue that it is a fundamental economic incentive for homeownership.Though tax reform appears to be on the backburner for now, Birnbaum cautioned Realtors not to rest on their laurels.””Modifying or eliminating some current tax measures for homeownership is a very real possibility, so don’t count them out from future tax reform. Lawmakers need to hear from you about the importance of maintaining current tax policies for homeowners and investors,”” he said, adding that “”[n]o one wants to be caught flat-footed if Congress decides to act quickly with tax reform.””In another session, NAR research economist Danielle Hale refuted the common criticism that the MID isn’t widely used. According to Hale, approximately three out of four homeowners with a mortgage (a quarter of all tax payers) claim the deduction–about the same number as those who claim charitable contributions.She also noted that first-time homebuyers can benefit from the MID, as most of them finance their purchase. The deduction is particularly useful in the early years of a mortgage and is typically not claimed toward the end, when the amount of interest paid is so little that the standard deduction is a better option.””At any given time, only half of home owners claim the mortgage interest deduction, but over the course of a lifetime we estimate that roughly 70 percent of households that ever own a home will use the MID,”” Hale said.According to NAR, the typical beneficiary of the MID is younger than 45, married, has children, and earns less than $200,000 annually. May 17, 2013 398 Views center_img Analysts Address Mortgage Interest Deduction at Realtor Expo Agents & Brokers Attorneys & Title Companies Investors Lenders & Servicers National Association of Realtors Politics Service Providers 2013-05-17 Tory Barringerlast_img

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