Tax Reform

Like many of you, I am reading up on the tax reform changes to determine how the laws will potentially affect property ownership.

houseMain observations-

1) Deduction of property taxes capped at $10,000 total.  An exception will be if a property is held as an investment and property taxes are listed as an expense on Schedule C of a tax return.

2) Mortgage interest deduction limited to the first $750,000 of debt (existing mortgages grandfathered).

3)  The interest paid on home equity loans and lines of credit will no longer be deductible.

4)  Fees paid to tax preparer no longer deductible.  Yet wonder if it’s a line item expense for an investment property on Schedule C- maybe?

5) The ability to transfer investment property via a 1031 Tax Deferred Exchange remains the same.

6) Capital gains rates – no changes.

Question for your accountant: are there benefits to change the classification of your shore property?  Second home versus an investment property?

 

 

 

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