Saturday, December 18, 2010

What's the fate of Mortgage Interest as an Itemized Deduction?

There is discussion in US Congress that the tax deduction for mortgage interest may be eliminated.

Some proposals set a threshold of a certain maximum mortgage amount above which no deductions will be allowed, but also set a declining percentage of the total mortgage interest that is deductible, eventually running to zero, or non of the mortgage interest will be deductible.

The President's Debt Reduction Panel suggested a lifetime cap of 12% of the mortgage on a primary residential property up to $500,000 balance.

No word on whether the second home mortgage interest deduction will change or be eliminated, but don't count on it to remain as it is.

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