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So we should put a cap on the interest deductible. I suggest at the 90th percentile home value. That way most of the lower income folks could deduct their interest but someone with a 5 million dollar mortgage on a NYC apartment could only deduct some of the interest.
I prefer using percentile because it automatically compensates for inflation unlike the Alternative Minimum Tax boondoggle. The system I would really like is a general deduction equal to the 90th percentile of all income from all sources. Theoretically that would free around 270 million of our citizens from Federal Income Tax.
This is an idea that I could live with. Since the majority of homeowners are middle class, and would not fall into the 90th percentile, it would only affect the wealthiest homeowners.
I recall the BO Administration naming some things they would be changing, along these lines. They said they would be incrementally? I think, doing-away with our Mortgage Interest Deductions, and our giveing to charitable organizations.
If any GOP are talking about doing this-the shock that this is, if so, they surely are offering it up as part of something they know that BO is pushing for.
For everyone whining about this deduction, you do realize that this deduction, comes off of your total income, it's not a dollar for dollar deduction. Which means, if your middle class, and have a $250K home and your mort interest is at 5%, you get to deduct $12.5K or so from your total income.
Which means, if you have a total taxable income of $50,000 after all other deductions, your Fed income tax is $6666.00, if you are able to deduct your $12,500.00 mortgage interest, your taxable income would be $38,000.00, meaning you would pay $4800.00, saving you $1,800.00.
Of course of you have a $2.5 Million dollar house financed, then you would be deducting $125,000 from your total income.
Again, it's not a dollar for dollar deduction, it's a deduction from your total income, which will lower your actual federal income tax a percentage only.
When you buy a rental property to rent you take into account your exit strategy and that is were capital gains come in. If you have a house that you estimate will be worth 100 k in 5 years when you want to sell that extra 15% or 15k That will need to be made up in that 5 years so 250 a month extra.
Not sure you understand how to invest in rental property the more I get taxed the more I have to pass on to the end user and that is with every business
For everyone whining about this deduction, you do realize that this deduction, comes off of your total income, it's not a dollar for dollar deduction. Which means, if your middle class, and have a $250K home and your mort interest is at 5%, you get to deduct $12.5K or so from your total income.
Which means, if you have a total taxable income of $50,000 after all other deductions, your Fed income tax is $6666.00, if you are able to deduct your $12,500.00 mortgage interest, your taxable income would be $38,000.00, meaning you would pay $4800.00, saving you $1,800.00.
Of course of you have a $2.5 Million dollar house financed, then you would be deducting $125,000 from your total income.
Again, it's not a dollar for dollar deduction, it's a deduction from your total income, which will lower your actual federal income tax a percentage only.
For everyone whining about this deduction, you do realize that this deduction, comes off of your total income, it's not a dollar for dollar deduction. Which means, if your middle class, and have a $250K home and your mort interest is at 5%, you get to deduct $12.5K or so from your total income.
Which means, if you have a total taxable income of $50,000 after all other deductions, your Fed income tax is $6666.00, if you are able to deduct your $12,500.00 mortgage interest, your taxable income would be $38,000.00, meaning you would pay $4800.00, saving you $1,800.00.
There is no way a family could afford a $250k loan on $50k income.
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Of course of you have a $2.5 Million dollar house financed, then you would be deducting $125,000 from your total income.
Not exactly. Deductions phase out very quickly based on your income. And AMT kicks in too. High income people already lose a lot of deductions.
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Again, it's not a dollar for dollar deduction, it's a deduction from your total income, which will lower your actual federal income tax a percentage only.
Correct.
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