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Old 07-25-2017, 09:13 PM
 
Location: Raleigh
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Its really a moot point. It would be complete political suicide to do away with it.
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Old 07-25-2017, 09:38 PM
 
Location: SoFlo
777 posts, read 487,545 times
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Quote:
Originally Posted by foundapeanut View Post
Maybe it would reduce the demand for luxury housing? But having a higher income we can NOT take the deduction per our CPA. So we paid cash for our house.

Actually, if you do the math, you don't get a dollar for dollar write off. And the highr your income the less you can write off till you make too much and can write off nothing.
I agree, this mortgage deduction is a joke at higher income levels, and I think is overall negative as it creates a perception that the deduction offsets the cost of a higher mortgage, encouraging people (even at higher income levels) to buy a house they really cannot afford. Factoring in even low interest mortgages, the amount in interest paid far exceeds the deduction and one could even make a good case for paying off a mortgage early vs. increased investment in 401k's and other investments. I would be thrilled if they got rid of it and cut income tax rates.
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Old 07-26-2017, 04:41 AM
 
11,892 posts, read 14,359,727 times
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It would be political suicide to kill it, but it could be greatly debased by increasing the standard deduction.
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Old 07-26-2017, 04:57 AM
 
Location: North Beach, MD on the Chesapeake
32,107 posts, read 39,170,046 times
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Quote:
Originally Posted by NickofDiamonds View Post
I think that they should eliminate it for the second or more houses bought and use it only for the primary residence.


Houses should be used for to be homes and not for speculation which just drives up the rents for the people who can't buy a home. If you have that much money to burn, you don't need financial help from the lower and middle class taxpayers who you are trying to take advantage of !
Really, how many homes does one need ?
Would you also remove the deduction for those who own rentals? The cost of the mortgage, both principal and interest, is fully deductible (as are all costs of ownership such as property taxes and maintenance and repairs) as a cost of doing business.

So penalize an individual homeowner who may also have a vacation house is your plan?
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Old 07-26-2017, 06:53 AM
 
Location: Shawnee-on-Delaware, PA
3,673 posts, read 3,253,057 times
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Quote:
Originally Posted by kwong7 View Post
I'd be in favor of a step-down phase-out to limit the consequences of removing such a tax deduction.

Right now the mortgage interest on a 2nd home is deductible. I'd start by eliminating that deduction, then the deduction for new 2nd mortgages on the first home, then phase in further reductions on primary mortgages.


There was a time (1970's?) when interest on consumer debt was deductible on Federal taxes. My parents, children of the Great Depression who always paid cash for everything (except the house) were particularly happy to see that deduction go away.
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Old 07-26-2017, 07:46 AM
 
4,229 posts, read 1,905,340 times
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A point to consider is how an agreed upon sales prices can be arrived at between an existing homeowner who bought with the benefit of the HMI deduction in place and an interested buyer who would not have the deduction available.
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Old 07-26-2017, 07:49 AM
 
17,615 posts, read 12,203,533 times
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Quote:
Originally Posted by Pub-911 View Post
A point to consider is how an agreed upon sales prices can be arrived at between an existing homeowner who bought with the benefit of the HMI deduction in place and an interested buyer who would not have the deduction available.
An agreed upon sales price would function no differently than it does now. The market will dictate the price, if you think your house is worth more than anyone will buy it for now it won't sell and the same thing would occur if the hmi was removed
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Old 07-26-2017, 08:01 AM
 
4,229 posts, read 1,905,340 times
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Quote:
Originally Posted by jtab4994 View Post
There was a time (1970's?) when interest on consumer debt was deductible on Federal taxes.
While investment and business interest were not much affected by the Tax Reform Act of 1986, most personal interest became non-deductible, except for that on personal credit secured by equity. The result was a huge rush to open home equity loans and lines that other interest-bearing balances could be shifted into, thus preserving their deductible nature.
Good thing? Bad thing?
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Old 07-26-2017, 08:51 AM
 
Location: Texas Hill Country
8,856 posts, read 4,826,319 times
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I suppose a lot of it depends if one is into mortgages and they understand that type of thing to whether or not they would respond to it.

Me, the brothers told me that mortgages were a way to make money but I couldn't see how a monthly payment figured into that........so the house was all paid off in just a few months after I took possession.
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Old 07-26-2017, 09:04 AM
 
2,849 posts, read 3,970,514 times
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Quote:
Originally Posted by North Beach Person View Post
Would you also remove the deduction for those who own rentals? The cost of the mortgage, both principal and interest, is fully deductible (as are all costs of ownership such as property taxes and maintenance and repairs) as a cost of doing business.

That doesn't sound right - can one of the tax experts clarify?
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