Homeowner's tax deductions threatened!
The President's tax reform panel is currently reviewing ways to amend the tax code. Up for discussion at the moment are the two tax incentives for homeowners. First is the mortgage interest deduction and second is the capital gains exclusion upon sale.
The online article quotes panel member James Michael Poterba, associate head of the economics department at MIT, with interesting statistics: (1) "The top 2.2 percent of tax returns claim 22 percent of the benefits from the mortgage-interest deduction" and (2) "In 2002, of the 130 million federal tax returns filed, only 46 million itemized. Of those, 37 million claimed the mortgage-interest deduction. (Those who don't itemize just take the standard deduction, which they would get even if they didn't own a home.)"
The panel is consider many options to change the existing tax structure with regard to home ownership, while preserving tax incentives to buying a home.
The final report is due November 1. We'll be watching for it!
To read more: tax changes - mortgage interest deduction and capital gains