Trump Tax Reform and Home Prices

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Let's face it, the reason people on this forum are mad is they live in expensive homes with large interest payments and high property taxes.  Not only that, but they choose to live in a high tax state with lots of amenities.  For these well off citizens, their tax bills are going up.  But instead of just admitting they only care about their own pocket books, they are cloaking their opposition to the bill as sympathy for the elderly and opposition to the one percenters.
 
I don't think existing mortgages would be affected--only purchases after Nov 2 2017.

Liar Loan said:
Let's face it, the reason people on this forum are mad is they live in expensive homes with large interest payments and high property taxes.  Not only that, but they choose to live in a high tax state with lots of amenities.  For these well off citizens, their tax bills are going up.  But instead of just admitting they only care about their own pocket books, they are cloaking their opposition to the bill as sympathy for the elderly and opposition to the one percenters.
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eyephone said:
I guess I?m speaking up for people that don?t have voices or are misinformed.
1. The medical costs can no longer be deducted. Who?s affected? Senior citizens, people with health issues, etc.. (I have a soft spot for senior citizens)
2. Education - people can no longer deduct student interest. Also, for graduate students the GOP plan is to eliminate section 117 of the tax code and subject tuition support to taxation. 
3. Moving expenses will no longer be dedtuctable.
4. Getting rid of the state and local taxes deduction.
5. Charitable contributions might go down since people will take the standard deduction. In effect might hurt donations to charitable organizations.
6. Capital gains exemptions for selling property change to five years instead of two.
7. Teacher spending deduction eliminated under the house plan. It is raised from $250 to $500 under the senate. (There are a lot of teachers that spend out of pocket. Also, I believe teachers are key for our society. I say help them out!)

Most of these will effect people nationwide.
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A lot of senior citizens pay NO taxes and therefore don't deduct medical costs.

I sell a whole lot of low cost stuff to people all over the U.S. and I always google their address to make sure they got the entire address included (apt numbers, business addresses with no biz name/suite number, wrong zip codes, etc) and usually Zillow or redfin will come up with their address and last sale or nearby properties and what I see is mostly much lower priced properties recently purchased. They are well under $500K so no way they would have a mortgage higher than that and how much can property taxes be on homes priced that low? Under $10K.

My youngest daughter is a teacher and pays for a lot of stuff oop. She has never once written off a dime and in fact she will be much better off with tax reform since she's a renter. She's getting married next year and they plan on buying a house. The deductibility of the mortgage or lack thereof hasn't changed their mind one iota.

My oldest daughter probably breaks even or is better off since she's got a couple kids. They just bought a new house in AZ ($500K with lots of upgrades thru the builder). Again they will be better off.

My middle daughter bought a house at the bottom of the market in Rancho Bernardo. No mello. She WOULD be better off if she didn't need IVF in January and has no kids.

My hubby and me will be worse off only because we had some very high deductions associated with his dad's estate (paid inheritance tax years ago on his dad's ira which we get a deduction when we take distributions for which we pay income tax) and interest and some other thing I can't remember associated with the stock losses (in addition to the wash sale carry forward which I think remains) we had in 2000.

There is no way under either plan we can ever do more than standard deduction with only property taxes and charitable deductions.

Anyhoooo....... I think for a lot of people not here in California or other high tax states, tax reform will help.

I'm ticked we're paying income tax on his dad's ira after paying inheritance tax on the same money when inheritance tax is being eliminated but that's life.
 
aquabliss said:
Passed the senate, 51-49
http://www.cnn.com/2017/12/01/politics/senate-tax-bill-vote-uncertainty/index.html
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They kept the mortgage deduction at a million, doubled the teacher deductions to $500 from $250 (no wonder my daughter never bothered deducting it in the first place), added in the property tax deduction to $10K, lowered the brackets.

Eliminated state income/local income tax deductions, raised the standard deduction and eliminated exemptions but doubled child credit and expanded who can get that.

Seems like it should pass the house pretty easy.
 
Disgusting doesn?t even begin to describe what happened with this bill . 

If there was every any doubt , GOP is now firmly a party owned by the ultra rich asset owners and business owners and not the vast majority of middle or upper middle class Americans wage earners. If you make your living off of a paycheck or w-2, this should be a wake up call for you .

And don?t throw that trope about growth ? stock market is a short term ?voting ?machine not a ?weighing? machine . I doubt if any of the benefits will trickled down to us salary earners .

The Raegan tax cuts were largely popular because they actually cut people?s taxes . This one is just corporate and hedge fund welfare and nothing else .

Sad thing is they can do this now knowing many of the rubes will keep voting against their own interest driven by tribalism and hatred of the other side . Amazes me how much this country has changed over the last two decades or so under the influence of right wing media.
 
In response to your comment. This is an example from Money owned by Time of a senior using the medical deduction.

?Here?s how the deduction works: let?s say a single senior with $40,000 in annual gross income has medical expenses of $6,000 annually. The amount over 10% of her income, or $2,000, would not be subject to tax. If her taxable income puts her in the 15% bracket, she?d lose out on $300 of federal income tax savings, according to Greg Geisler, professor of accounting at the University of Missouri-St. Louis.

Those who use the deduction to pay for long-term care costs stand to lose a lot more. Amoruso has a client in her mid-80s who pays, on her own, the $11,000 monthly cost of her assisted living facility. She can afford to do this by selling highly appreciated stock and using the medical expense tax deduction to eliminate any taxes she would owe. An increase in the standard deduction would not help her, as it would not equal her savings under the medical expense deduction, and she would be faced with a higher tax burden on top of her substantial care costs.?
https://www.google.com/amp/amp.time...s-and-their-families-is-on-the-chopping-block

The senate included in their plan, but the house did not. I guess we will see what happens.



Ready2Downsize said:
eyephone said:
I guess I?m speaking up for people that don?t have voices or are misinformed.
1. The medical costs can no longer be deducted. Who?s affected? Senior citizens, people with health issues, etc.. (I have a soft spot for senior citizens)
2. Education - people can no longer deduct student interest. Also, for graduate students the GOP plan is to eliminate section 117 of the tax code and subject tuition support to taxation. 
3. Moving expenses will no longer be dedtuctable.
4. Getting rid of the state and local taxes deduction.
5. Charitable contributions might go down since people will take the standard deduction. In effect might hurt donations to charitable organizations.
6. Capital gains exemptions for selling property change to five years instead of two.
7. Teacher spending deduction eliminated under the house plan. It is raised from $250 to $500 under the senate. (There are a lot of teachers that spend out of pocket. Also, I believe teachers are key for our society. I say help them out!)

Most of these will effect people nationwide.
Click to expand...

A lot of senior citizens pay NO taxes and therefore don't deduct medical costs.

I sell a whole lot of low cost stuff to people all over the U.S. and I always google their address to make sure they got the entire address included (apt numbers, business addresses with no biz name/suite number, wrong zip codes, etc) and usually Zillow or redfin will come up with their address and last sale or nearby properties and what I see is mostly much lower priced properties recently purchased. They are well under $500K so no way they would have a mortgage higher than that and how much can property taxes be on homes priced that low? Under $10K.

My youngest daughter is a teacher and pays for a lot of stuff oop. She has never once written off a dime and in fact she will be much better off with tax reform since she's a renter. She's getting married next year and they plan on buying a house. The deductibility of the mortgage or lack thereof hasn't changed their mind one iota.

My oldest daughter probably breaks even or is better off since she's got a couple kids. They just bought a new house in AZ ($500K with lots of upgrades thru the builder). Again they will be better off.

My middle daughter bought a house at the bottom of the market in Rancho Bernardo. No mello. She WOULD be better off if she didn't need IVF in January and has no kids.

My hubby and me will be worse off only because we had some very high deductions associated with his dad's estate (paid inheritance tax years ago on his dad's ira which we get a deduction when we take distributions for which we pay income tax) and interest and some other thing I can't remember associated with the stock losses (in addition to the wash sale carry forward which I think remains) we had in 2000.

There is no way under either plan we can ever do more than standard deduction with only property taxes and charitable deductions.

Anyhoooo....... I think for a lot of people not here in California or other high tax states, tax reform will help.

I'm ticked we're paying income tax on his dad's ira after paying inheritance tax on the same money when inheritance tax is being eliminated but that's life.
Click to expand...
 
Article talks about bill killing ACA by taking away individual mandate.  Not sure how ACA can survive even in its current form.  The mandate penalty has not prevented younger healthy individuals from opting out.  Private insurers will not continually operate at a loss.  My fear is that if ACA continues, then 3.8% investment income tax will increase over time as government needs more and more money to prop up ACA.
 
morekaos said:
If the NYTimes hates it this much I 100% love it!!

https://www.nytimes.com/2017/12/02/opinion/editorials/a-historic-tax-heist.html

A Historic Tax Heist
Click to expand...

MAGA voters are such an easy mark ... and Trump loves it !!

I bet if we ever get into a nuclear conflict due to some blunder by Trump and NYT is still around to write an op ed piece against it, his supporters will be gloating " I know I am living in nuclear fallout but hey look at the bright side -- at least we owned the liberals  "  :)
 
No more deduction for interest on home equity debt. A $10,000 cap on the deduction for real estate taxes. A new requirement that you own your home for 5 years ? rather than 2 ? before you can sell it tax-free. It?s not a great time to sell houses for a living.

Winner: Rental Real Estate Owners

It is a great time, however, to be a landlord. For starters, the life over which you can depreciate your property has been reduced ? from 27.5 years to 25 years for residential property and from 39 years to 25 years for nonresidential property. In addition, while most other businesses will find their interest deduction limited under the Senate bill, that limitation doesn?t apply to landlords, who can continue to deduct their mortgage interest in full.

Real estate owners will really enjoy a windfall, however, if the final bill adopts the House version of ?pass-through? taxation. Under the House bill, all rental income will be subject to a top rate of 25%, as opposed to 39.6% under current law. Under the Senate bill, however, it appears that for those large landlords earning more than $700,000 annually, unless the rental properties or a management company pays out significant W-2 wages, the owners would be stuck paying a top rate of 38.5% on the income, a rate 13.5% higher than under the House bill.
 
Another winner: Private Schools

Sen Cruz managed to get an amendment allowing the use of 529 Plans for elementary and high school private education.

This will probably further erode public education in California. It will siphon more students to private schools and increase pressure on California to cut the education budget.
 
iacrenter said:
Another winner: Private Schools

Sen Cruz managed to get an amendment allowing the use of 529 Plans for elementary and high school private education.

This will probably further erode public education in California. It will siphon more students to private schools and increase pressure on California to cut the education budget.
Click to expand...

Another example how the tax plan benefits the wealthy.
 
eyephone said:
iacrenter said:
Another winner: Private Schools

Sen Cruz managed to get an amendment allowing the use of 529 Plans for elementary and high school private education.

This will probably further erode public education in California. It will siphon more students to private schools and increase pressure on California to cut the education budget.
Click to expand...

Another example how the tax plan benefits the wealthy.
Click to expand...

This is why the GOP crowd is willing to put blinders on and vote for a child molester (Moore) over a civil rights crime prosecutor (Jones) -- Supreme Court Justices.  Remember "Citizens United" decision a few years back and the river of private corporate donor $$ that flowed into GOP coffers for the subsequent elections ?  This is a transparent payback for that.

As an independent voter with no party to call home, I still wish the Democrats learned to fight these goons on their own dirty turf and not roll over so easily.  When will they learn . 
 
the.irvine said:
No more deduction for interest on home equity debt. A $10,000 cap on the deduction for real estate taxes. A new requirement that you own your home for 5 years ? rather than 2 ? before you can sell it tax-free. It?s not a great time to sell houses for a living.

Winner: Rental Real Estate Owners

It is a great time, however, to be a landlord. For starters, the life over which you can depreciate your property has been reduced ? from 27.5 years to 25 years for residential property and from 39 years to 25 years for nonresidential property. In addition, while most other businesses will find their interest deduction limited under the Senate bill, that limitation doesn?t apply to landlords, who can continue to deduct their mortgage interest in full.

Real estate owners will really enjoy a windfall, however, if the final bill adopts the House version of ?pass-through? taxation. Under the House bill, all rental income will be subject to a top rate of 25%, as opposed to 39.6% under current law. Under the Senate bill, however, it appears that for those large landlords earning more than $700,000 annually, unless the rental properties or a management company pays out significant W-2 wages, the owners would be stuck paying a top rate of 38.5% on the income, a rate 13.5% higher than under the House bill.
Click to expand...

So rather than cause houses to fall in value in areas that have limited supply, homes will not only hold their value but go up as the best deductions go to landlords. Any reduction in prices will quickly be scooped up by investors who can deduct all costs (HOA, insurance, property taxes, mortgage interest), have a lower tax rate, quicker depreciation and lets not forget the old folks with money.... rental income is favorable for those on social security.

Combine the inability to flip every two years and you have an even tighter supply.
 
How many housing related jobs are going to be lost with the low real estate turn over?

Construction/contractor related, mortgage/loan, real estate agents, home design/furnishing and a dozen more industries that are reliant on a strong real estate market.
 
Loco_local said:
How many housing related jobs are going to be lost with the low real estate turn over?

Construction/contractor related, mortgage/loan, real estate agents, home design/furnishing and a dozen more industries that are reliant on a strong real estate market.
Click to expand...

Do they care?
People with vacation homes/second homes under the new plan can no longer deduct mortgage interest.
 
Get a kick out of all the democrats whining on the news shows this weekend about the tax plan. Wasn't it just 8 years ago that they passed the ACA to make their president look good in his first year, without any republican support or input because they were obstructionists, that was so complicated that even they didn't have the time to read it thoroughly (remember the "Read The Bill" protests), with only a 50%+1 vote required, and that the republicans felt was an abomination? Turn around is fair play!? Thanks to the way the democrats handled the ACA they set the pattern for the republican tax plan. Of course for the past two decades or so, the democrats were telling many Americans (primarily republicans and middle America) that they were idiots, their moral system of values was wrong, and basically that only they knew what was right. This was the same group of Americans who had enough of this and voted in Trump. Trump really should give a shout out to the dems for their major help in getting him elected! 

I feel for those who bought a newly built home this past year. Their 2017 tax bill will likely only include the MR plus a small value for the vacant land. Next year they'll get their supplemental tax bill for 2017 plus the regular (and much larger) 2018 tax bill - of which only $10K will be deductible. And those who purchased in the Great Park with their insane CFD's? I'm getting ready to pay my April 2018 installment the day after the tax bill passes. I bet many others will do the same.
 
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