How Does the “Fiscal Cliff” Bill Impact KANSAS CITY and LEE’S SUMMIT, MO Homeowners

How Does the “Fiscal Cliff” Bill Impact KANSAS CITY and LEE’S SUMMIT, MO Homeowners?
The National Association of Realtors (NAR) has listed the following Issues Brief explaining fiscal cliffhow provisions of H.R. 8, legislation to avert the “fiscal cliff”. This is just a summary of those things that pertain to real estate owners in the KANSAS CITY area, LEE’S SUMMIT, MO and throughout the country. For further clarification, please contact your CPA, tax accountant or legal counsel. If your clients have a question about what this means to them, you should always direct them to their legal and financial counsels. However, this information is important for us to know as we guide them through their real estate transactions. Below the summary, I’ve posted a full copy of the bill.
Following are real estate-related provisions of H.R. 8:
 •Mortgage Forgiveness Debt Relief Act: has been extended to January 1, 2014. In place since 2007, the act provided a tax break for homeowners who struggled through financial hardship such as a foreclosure, and were granted mortgage debt forgiveness. National Association of Realtors (NAR) issued numerous calls to action urging its million-plus Realtor members to ask lawmakers to extend the tax break. More than a quarter of all transactions involve distressed properties, the NAR said in its plea. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.”
 Deduction for mortgage insurance premiums: for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012.
 Leaseholder Improvements: 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.
 The 10 percent tax credit (up to $500) for homeowners for energy efficiency improvements to existing homes is

Fiscal cut

Fiscal cut

extended through 2013 and made retroactive to cover 2012.
 Permenant Repeal of Pease Limitations for 99% of Taxpayers: “Pease limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high-income filers. “Pease” limitations will only apply to individuals earning more than $250,000 and joint filers earning more than $300,000.
 The capital gains rate remains at 15 percent for individuals earning less than $400,000 per year and couples earning less than $450,000. Any gains above these amounts will be taxed at 20 percent. The $250,000/$500,000 exclusion for the sale of principle residence remains.

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