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Old 10-01-2017, 08:17 PM
 
Location: Living rent free in your head
30,989 posts, read 13,564,601 times
Reputation: 22078

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Quote:
Originally Posted by lenora View Post
I've always kind of wondered if housing is so darn expensive in certain areas because there is a very large mortgage deduction available that can jack up prices.

And maybe the home equity loan deduction is not such a good idea either. Who really benefits from this deduction? Banks?
I don't think anyone able to buy a million dollar house does so for the mortgage interest deduction, people who can buy expensive houses will continue to buy expensive houses, this will just hurt the ordinary shlocks who are buying $250,000 - $350,000 houses.

 
Old 10-01-2017, 08:41 PM
 
Location: Forests of Maine
30,671 posts, read 49,423,020 times
Reputation: 19124
Quote:
Originally Posted by lenora View Post
... And maybe the home equity loan deduction is not such a good idea either. Who really benefits from this deduction? Banks?
When you refinance a house, the mortgage is indistinguishable from any other mortgage. Your reason for the mortgage is not the issue.

By it being a deduction it shelters you from taxes.
 
Old 10-01-2017, 08:48 PM
 
Location: Wisconsin
21,534 posts, read 43,972,276 times
Reputation: 15135
Plan is eliminating deduction for state and local taxes - not mortgage interest, not charity.

With only mortgage interest and charity deductible, many won't itemize.

Home values/sales in high-tax states will drop without that writeoff.

Charitable contributions will also be negatively affected to the extent of the tax increase as a result of the loss of those writeoffs.

Last edited by Ariadne22; 10-01-2017 at 09:17 PM..
 
Old 10-01-2017, 09:08 PM
 
Location: Out there somewhere...a traveling man.
39,527 posts, read 47,687,050 times
Reputation: 110326
According to one of the tax experts on one of the am TV news shows today, he said the main benefactor of Trumps tax plan is Trump himself will get approximately a 73 million dollar tax break. That everyone one else except the very poor who are not a multi millionaires will end up paying some taxes, not getting a tax break.

Another article states Trump will save 1 billion plus.
Trump Could Save More Than
$1 Billion Under His New Tax Plan
.
https://www.nytimes.com/interactive/...t.html?mcubz=1

Last edited by wit-nit; 10-01-2017 at 09:16 PM..
 
Old 10-01-2017, 09:09 PM
 
Location: Chesapeake Bay
6,048 posts, read 3,868,534 times
Reputation: 3502
Quote:
Originally Posted by Ariadne22 View Post
Plan is eliminating deduction for state and local/property taxes - not mortgage interest. Home values in high-tax states will drop without that writeoff. States with lousy social safety nets and public services don't have these taxes, nor do they have high property values - and they leech off the states with the higher incomes and better social safety nets as has been cited the past few pages.

I have always itemized. Local property taxes, state income tax, and state sales tax comprises over 50% of the itemization. Loss of that deduction is extremely serious here, in WI, and doubly so on the east coast.
Makes one wonder though. If mortgage interest is still included in this tax proposal then that implies there will be a mortgage interest line (or the equivalent somewhere) on the 1040. Which means then that everyone that has a mortgage could (and would) include that deduction regardless of the state they live in even if they couldn't meet the old $12,700 deduction threshold.
 
Old 10-01-2017, 09:19 PM
 
Location: Wisconsin
21,534 posts, read 43,972,276 times
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Quote:
Originally Posted by Weichert View Post
Makes one wonder though. If mortgage interest is still included in this tax proposal then that implies there will be a mortgage interest line (or the equivalent somewhere) on the 1040. Which means then that everyone that has a mortgage could (and would) include that deduction regardless of the state they live in even if they couldn't meet the old $12,700 deduction threshold.
It is my understanding, mortgage interest, charitable contributions, medical expenses are deductible only IF the taxpayer itemizes, rather than uses the standard deduction.
 
Old 10-01-2017, 09:41 PM
 
Location: Chesapeake Bay
6,048 posts, read 3,868,534 times
Reputation: 3502
Quote:
Originally Posted by Ariadne22 View Post
It is my understanding, mortgage interest, charitable contributions, medical expenses are deductible only IF the taxpayer itemizes, rather than uses the standard deduction.
Then basically, mortgage interest is being dropped regardless of what is being said. By implication it would be. Not that many could exceed a $25,000 deductible threshold without including state taxes.
 
Old 10-02-2017, 02:06 AM
 
71,463 posts, read 71,652,652 times
Reputation: 49027
most of america does not itemize
 
Old 10-02-2017, 02:07 AM
 
71,463 posts, read 71,652,652 times
Reputation: 49027
Quote:
Originally Posted by Submariner View Post
When you refinance a house, the mortgage is indistinguishable from any other mortgage. Your reason for the mortgage is not the issue.

By it being a deduction it shelters you from taxes.
a deduction is like spending 4 dollars to win a 1 dollar prize . it is merely a rebate of an expense . it is not a tax shelter . a tax shelter lets you keep money you earned that you did not spend in the first place. in the case of mortgage interest you would be farther ahead not paying the interest in the first place .

what you do with the money and how you might invest it if it was not tied up in the house is a different issue not tax related . not everyone has the knowledge ,the nerve or the discipline to invest . so for most no mortgage would be a better deal than the deduction ..

in fact the best tax deal is those generally who can't itemize and have few deductions . odds are they are not spending the money in the first place on these deductible items and benefiting from getting money back just based on the standard deduction . a renter couple tax wise may have 5 or 6k in actual deductible items but they see an almost 13k allowance so they put money back in to piggy they never spent tax wise. that homeowner likely shelled out much more in deductible dollars so there is a whole lot less flying the empty seats ..

remember we are talking only from a tax perspective , not total costs of living .

Last edited by mathjak107; 10-02-2017 at 03:16 AM..
 
Old 10-02-2017, 02:42 AM
 
Location: Washington State
18,445 posts, read 9,548,793 times
Reputation: 15733
Quote:
Originally Posted by 2sleepy View Post
I don't think anyone able to buy a million dollar house does so for the mortgage interest deduction, people who can buy expensive houses will continue to buy expensive houses, this will just hurt the ordinary shlocks who are buying $250,000 - $350,000 houses.
No it won't because a couple will get an increase in the standard deduction by $12K and most ordinary shlocks aren't paying more than $12K in property tax and state income tax except for in a few states. It will hurt high income earners in high state tax states the most.

70% of middle class will pay less and the majority of high income earners will pay more....that's the facts.
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