A Fiscal Cliff sounds more like a marathon obstacle than a budget proposal, and trying to decipher its relevance to our personal lives might have caused you a headache over the past few weeks. In order to answer any questions that you might have had about the bill and its effect on the real estate industry, we went ahead and broke down the provisions.
First off, what is the Fiscal Cliff? It’s a cluster of Federal Tax increases and spending cuts made with hopes of eliminating some of the national budget deficit.
There were several tax extensions for real estate:
- Mortgage Cancellation relief has been extended for one more year until January 1, 2014.
- Deductions for mortgage insurance premiums for filers making below $110,000 is extended through 2013.
- A 10% tax credit (up to $500) for homeowners for energy improvements in existing homes is extended through 2013.
- The first $5 million in individual estates and $10 million for family estates is exempt from the estate tax.
Hopefully this will clear up any questions that you might have had regarding the Fiscal Cliff and its effect on your real estate interests.