I thought it would be a good idea to let you know some of the provisions included in the compromise that affect real estate.
* Mortgage Cancellation Relief is extended for one year to January, 2014
* Mortgage Interest Deduction remains unchanged
* Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012
* Energy Efficiency Tax Credit: The 10% tax credit (up
to $500) for homeowners for energy efficiency improvements to existing
homes is extended through 2013 and made retroactive to cover 2012
* Capital Gains rate stays at 15% for those individual
filers earning $400,000 or joint filers earning $450,000. After that any
gains above those amounts will be taxed at 20%. The 250/500k exclusion
for sale of principle residence remains in place.
* Estate Tax: The first $5 million in individual
estates and $10 million for family estates are now exempted from the
estate tax. After that, the rate will be 40%, up from 35%. The exemption
amounts are indexed for inflation.