Like many of you, I am reading up on the tax reform changes to determine how the laws will potentially affect property ownership.
Main observations-
1) Deduction of property taxes capped at $10,000 total. Â 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) Â The interest paid on home equity loans and lines of credit will no longer be deductible.
4) Â Fees paid to tax preparer no longer deductible. Â 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? Â Second home versus an investment property?
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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.
1) Deduction of property taxes capped at $10,000 total. Â 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) Â The interest paid on home equity loans and lines of credit will no longer be deductible.
4) Â Fees paid to tax preparer no longer deductible. Â 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? Â Second home versus an investment property?