Tax Bill Impact to Real Estate
Yesterday, Congress passed the largest tax overhaul in 30 years. Much of the focus has been on the reduction of the corporate tax rate from 35% to just 21%. This benefits ALL businesses, large and small, like us little real estate investors. The benefits to the economy are expected to be widespread; however, some fear the deficit will increase if the economy doesn’t grow as a result. Well, if you know anything about economics you know that allowing people to keep more of their money, combined with more jobs and higher wages, will undoubtedly result in economic stimulus.
Regarding the mortgage deduction limit, the final compromise was $750,000 (hmm, I think this was predicted somewhere…). This is a decrease from the current $1M limit. This doesn’t have a huge impact on Colorado since only a small percentage of homes fit the category. The most affected are the wealthy homeowners who live in high-taxed states since the SALT (state and local tax) deduction is now capped at $10,000. This has the potential to cause high-dollar home values to decrease a bit.
House-hacking is still a good option. It appears that the proposal to raise the number of years that you must live in house to avoid capital gains from 2 years to 3 years didn’t make the final cut. There hasn’t been much talk about this provision, so I’m not 100% sure this is correct. If it had passed, I suspect there would be more talk about it. We’ll keep an eye on this one.
Want to estimate how the new tax will affect your budget? Check out this calculator! Use last years tax return to see how your tax bill would have been different under the new laws.
MLB Pitcher donates $10M estate to charity
Had enough of the tax bill? Here is a heartwarming story about a HUGE house that will now have a huge impact on children with special needs. Pitcher Cole Hamels had to stop building his dream house when he was traded, so he gave it away to Barnabas House, a charity that runs a summer camp for disabled children. Wow!
See you soon,
“In life, as in chess, forethought wins.“
READ THE FULL NEWSLETTER HERE: 2017.12.22 – Friday Flyer – merry christmas