Fiscal Cliff Deal and Housing Market

What do you think of the Fiscal Cliff Dea?

  • It is a good compromise

    Votes: 0 0.0%

  • It is adequate for now.

    Votes: 1 7.1%

  • We will see in 2 months

    Votes: 4 28.6%

  • Whatever...business as usual

    Votes: 5 35.7%

  • It is not a good deal but better than the fiscal cliff

    Votes: 2 14.3%

  • It is terrible

    Votes: 2 14.3%
  • Total voters
    14
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Irvinecommuter

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Interesting deal...I think it was a pretty good compromise but it pushes off the big decisions for another two months. 

There is a lot of talk on CNBC about how rates will start going up in the early parts of the year (I hope not) but I think that the continual pushing of deadlines will continue until the economy recovers a little more (6-9 months).  Of course, there are some people who say that the economy will not recover until a long term deal is done. 

So...what do all of you think about the fiscal cliff deal and what impact to you see it having on the economy and the housing/mortgage markets?

 
I like how they moved the tax cutoff from 200k/250k to 400k/450k.

I still don't understand why they do single/couple-family like that... if a single is taxed at 200k, why would you do that for a couple at 250k? It would seem more like 300 or 350k would be more logical assuming the 2nd earner makes about half of the first.
 
A couple of key points in summary, relating to RE concerns:

1. The Mortgage Forgiveness Debt Relief Act has been extended for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.

2. The settlement will allow capital gains rates to rise from 15 percent to 20 percent for high-income earners.

3. Capital gains rates on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 for married couples.


-IR2
 
IrvineRealtor said:
A couple of key points in summary, relating to RE concerns:

1. The Mortgage Forgiveness Debt Relief Act has been extended for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure.

2. The settlement will allow capital gains rates to rise from 15 percent to 20 percent for high-income earners.

3. Capital gains rates on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 for married couples.


-IR2
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They will also include the 3.8% Obama Healthcare Tax on top of the new capital gain/dividend tax amount starting in 2013.  So high earners will have a 23.8% tax on long term capital gains and dividends. 
 
irvinehomeowner said:
I like how they moved the tax cutoff from 200k/250k to 400k/450k.

I still don't understand why they do single/couple-family like that... if a single is taxed at 200k, why would you do that for a couple at 250k? It would seem more like 300 or 350k would be more logical assuming the 2nd earner makes about half of the first.
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It's the marriage penalty tax.  I'm sure a lot of DINK couples in Irvine experience it.  It just reinforces the need to do some serious financial planning before sending in the marriage certificate!
 
financially, if a couple make asymmetrical income (let's say 200k vs. 50k), they should legally divorce, the spouse with lower income quits working, and together live off the government freebies. It is just another way to get some tax refund for the higher income earner.

irvinehomeowner said:
I like how they moved the tax cutoff from 200k/250k to 400k/450k.

I still don't understand why they do single/couple-family like that... if a single is taxed at 200k, why would you do that for a couple at 250k? It would seem more like 300 or 350k would be more logical assuming the 2nd earner makes about half of the first.
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The Motor Court Company said:
financially, if a couple make asymmetrical income (let's say 200k vs. 50k), they should legally divorce, the spouse with lower income quits working, and together live off the government freebies. It is just another way to get some tax refund for the higher income earner.

irvinehomeowner said:
I like how they moved the tax cutoff from 200k/250k to 400k/450k.

I still don't understand why they do single/couple-family like that... if a single is taxed at 200k, why would you do that for a couple at 250k? It would seem more like 300 or 350k would be more logical assuming the 2nd earner makes about half of the first.
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The marriage penalty sucks but seriously...the increased tax rate is only as to the portion which you exceed the limit...it's not like your entire income gets taxed that high.  Also, we are talking about net income... business people often find deductions to drop their tax level.

It's a compromise...it was going to be at 250K.
 
Irvinecommuter said:
I didn't know that PMI premiums are now deductible...interesting as I may want to go with the FHA rather than the 80/10/10
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I think they've been deductible... but only if you earn less than $55k or $110k married.... which I think does not apply for most in Irvine (or OC).
 
I thought I had read that the payroll tax cut would be extended, but it was not, so that tax goes from 4.2% to 6.2%... bleh. Add on Obabamacare Tax and it's still fiscally cliffy.

It still boggles my mind that we pay the most taxes to Fed... isn't that unconstitutional? I'm going to throw some Chai Tea into the sink in protest.
 
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