How does the Fiscal Cliff Deal effect homeowners?

How does the Fiscal Cliff Deal effect homeowners?

 

Here’s a quick look at how the “fiscal cliff” deal passed by congress on New Year’s Day affects homeowners (for now):

· Current tax rates for all households earning less than $450,000,
and $400,000 for individual filers remain in effect;

· the tax rate on capital gains also remains the same, at 15 percent,
for most households, but for those earning above the $400,000-$450,000
threshold, the rate rises to 20 percent;

· the exclusion from taxes for gains on the sale of a principal
residence of up to $500,000 ($250,000 for individuals) remains in effect (subject
to limitations);

· personal exemptions and deductions are phased out for incomes
over $250,000 for singles and $300,000 for couples;

· mortgage cancellation relief for home owners or sellers who have
a portion of their mortgage debt forgiven by their lender, typically in a short
sale or foreclosure sale for sellers and in a modification for owners is extend
through 2013;

· deductions for mortgage interest, mortgage insurance premiums
and state and local property taxes, are extended;

· the alternative minimum tax (AMT) is permanently adjusted for
inflation;

· estates will be taxed at a top rate of 40 percent (up from 35
percent), with the first $5 million in value exempted for individual estates
and $10 million for family estates.

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