The Details: Real Estate and the Fiscal Cliff Deal
As part of your Realtor Membership benefits, we keep track of legislative issues that will affect your business and share them in a way that’s quick and easy to read.
On December 31, 2012, the White House and the Senate finalized the details of their deal to avert the fiscal cliff.
The fiscal cliff deal and how it affects real estate
Here is the breakdown of provisions affecting real estate in the fiscal cliff bill:
Mortgage Debt Cancellation Act
Extended through 2013
For more to understand the Mortgage Debt Cancellation Act, click here.
Mortgage Interest Deduction
The Mortgage Interest Deduction has not been changed. For more information about the Mortgage Deduction Act, click here.
Mortgage Insurance Premium Deduction
Extended through 2013 for those with incomes under $110,000.
State & Local Property Tax Deduction
This provision has been extended.
Energy Efficiency Tax Credit
The 10% tax credit (up to $500) for homeowners for energy efficiency improvements to existing homes has been extended through 2013.
Leasehold Improvements
The 15 year straight-line cost recovery for qualified leasehold improvements on commercial properties has been extended through 2013 and made retroactive to cover
2012.
Capital Gains Tax
Remains at 15% for most taxpayers.
23.8%* rate for those making $400,000 (individual)/$450,000 (couple); retains primary residence exemption up to $500,000 (couple)/$250,000 individual.
*includes 3.8% Medicare capital gains tax included in health care reform.
Estate Tax
Rises to 40% and includes a $5 million exemption. Of all small businesses and family farms in the country, only 40 were higher than the $5 million exemption last year.
For more information and additional details about the fiscal cliff deal, click here.
