Keep mortgage deduction?

[kent]

Raging controversy on the radio this morning about whether or not the mortgage deduction should be abolished or modified.

I think all the "second home" interest (vacation homes, motor homes and boats that qualify) should be eliminated unless it truly is a "primary residence."

Continue allowing the deduction for property taxes but reduce the cap on interest deductions for a primary residence to "some" number - maybe $500,000? This one is kind of a mine field though because of HCOL vs LCOL disparities.

What do you think?

[Miss Tequila]

Since I no longer have a mortgage and can't benefit...I say no mortgage deduction at all... Unless we are talking about Schedule E property (since I have one of those

[❤ mollymouser ❤]

We don't have a mortgage, so we haven't been able to use this deduction for years. If the deduction is eliminated, what would the government do with all that extra money?

[Bluerobin]

No more mortgage deduction. Also eliminate the Home Equity Loan deduction. Half these loans are used to buy cars, etc rather than homes!!! Can you tell my mortgage is paid off?

[spartyparty]

Dec 22, 2010 13:00:35 GMT -5 kent said:

Raging controversy on the radio this morning about whether or not the mortgage deduction should be abolished or modified.

I think all the "second home" interest (vacation homes, motor homes and boats that qualify) should be eliminated unless it truly is a "primary residence."

Continue allowing the deduction for property taxes but reduce the cap on interest deductions for a primary residence to "some" number - maybe $500,000? This one is kind of a mine field though because of HCOL vs LCOL disparities.

What do you think?

<<thumbs up>>

[spartyparty]

Dec 22, 2010 13:09:28 GMT -5 Miss Tequila said:

Since I no longer have a mortgage and can't benefit...I say no mortgage deduction at all... Unless we are talking about Schedule E property (since I have one of those

Boooooooo!!!!

[swamp]

I love my mortgage deduction. I can't deduct anything else..............

[kent]

Dec 22, 2010 14:33:55 GMT -5 Bluerobin said:

Also eliminate the Home Equity Loan deduction. Half these loans are used to buy cars, etc rather than homes!!!

Oops! I forgot about that one - it too for exactly the reason you stated.

[❤ mollymouser ❤]

Dec 22, 2010 14:45:17 GMT -5 swamp said:

I love my mortgage deduction. I can't deduct anything else..............

Can you deduct other taxes paid (property tax?)
Can you deduct charitable giving?

[Sum Dum Gai]

You can't get rid of it yet. 2011 will be our first full year with a huge mortgage. You have to let me realize the benefit at least once, so it stings that much more when you yank it away.

[The Virginian]

I'd like to see one flat rate tax for all, but that will never happen because there are too many jobs and special interests involved in the current tax fiasco. Too many IRS agents, Accountants would lose their jobs - not to mention all the money the government takes in because people make honest mistakes on their taxes because of its complications.

[swamp]

Dec 22, 2010 15:19:48 GMT -5 ❤ mollymouser ❤ said:

Dec 22, 2010 14:45:17 GMT -5 swamp said:

I love my mortgage deduction. I can't deduct anything else..............

Can you deduct other taxes paid (property tax?)
Can you deduct charitable giving?

OK, I get those deductions too. Any business expenses. And a child care thingy. But I still want the mortgage interest deduction too, dammit!

[Miss Tequila]

Dec 22, 2010 14:41:04 GMT -5 spartyparty said:

Dec 22, 2010 13:09:28 GMT -5 Miss Tequila said:

Since I no longer have a mortgage and can't benefit...I say no mortgage deduction at all... Unless we are talking about Schedule E property (since I have one of those

Boooooooo!!!!

Georgie, LOL!!!

[joynerk]

Don't know all the rules, but I think it should be kept on a sliding scale on primary residences only. Sliding meaning the more expensive the loan is, the less (%wise) you can deduct. I know it's a slippery slope as for cutoffs, etc, but really, if someone buys a $3m home there has to be a limit.

[Deleted]

If you think housing is in a crisis now...change this and ALL bets are off

The foreclosure mess...and the economy havent done enough damage to the real estate market

Let's make this change and let the REAL fun begin

[amishgal]

Money talk = zzzzzzzzzzz. Isn't that why EE was created? Freedom from religion and money talk?

[8 Bit WWBG]

Eliminating it entirely is a terrible idea. Some idiot politician was on NPR talking about how "all options need to stay on the table". Of course someone said it well that this is just more fear mongering and he wants credit for "making the tough choices" but won't actually follow through with it.

[Miss Tequila]

"Isn't that why EE was created? Freedom from religion and money talk?"

I thought it was so we could drink

[❤ mollymouser ❤]

[suzwantstobefree]

Well, there is a cut off on the mortgage interest deductions. You can only deduct the interest on your primary home loan of up to $1 million loan. It is also subject to some cutoffs if you are in a high income bracket. You are also limited on the HELOCS for the interest on the first $100K. I like this deduction because it promotes home ownership which (and I know I am going to get some heat on this) is in my opinion a good type of debt and the deduction helps promote home ownership. Mortgage interest deductions on second homes and vacation homes should not be deductible in my opinion.

However, I think that HELOC's should be banned completely. That really hurt us as a country when we were going through the real estate bubble. People were seeing their home values rise and as a result started pulling money out to use for other types of debts. When the values tanked, they walked away with their paid off cars (lol)! I feel that any homeowner should have to make an investment of no less than 10% down payment and they should not be allowed to take out money on their homes. Even refinances should be limited to refinancing the home and not to take more money out!!! I am really opinionated on this so please go easy on me!!! I just think we have to do something to force people to make better financial decisions.......

[moon/Laura]

i'm going to move this to the tax board for the moment because that's where it seems to fit best... it's brand new, and so unmoderated at the moment but there was interest in having one.

[suzwantstobefree]

Dec 22, 2010 15:35:10 GMT -5 The Virginian said:

I'd like to see one flat rate tax for all, but that will never happen because there are too many jobs and special interests involved in the current tax fiasco. Too many IRS agents, Accountants would lose their jobs - not to mention all the money the government takes in because people make honest mistakes on their taxes because of its complications.

I think a federal sales tax would be a really good way to do things. Instead of income tax, you pay when you buy stuff. If you consume a lot, you pay more, if you consume little you pay less. Easy peasy!!!! And of course, no sales tax on food.

[whoisjohngalt]

Keep the deduction and get rid of NUMEROUS CREDITS that make some people actually GET money instead of paying it.

[suzwantstobefree]

Dec 26, 2010 12:04:47 GMT -5 whoisjohngalt said:

Keep the deduction and get rid of NUMEROUS CREDITS that make some people actually GET money instead of paying it.

Agreed! If you don't pay in taxes, you shouldn't be able to get a huge refund!!!!! I also think more investments should be made in enforcement and reducing fraud. Everyone should pay their fair share.

[vl]

Say it correctly... abolish The Tax Reform Act. Abolishing the Act eliminates the mortgage interest deduction while also putting numerous wealth and big business shelters, write-offs and deductions into reform contention.
I'm an advocate of a single tax rate on purchases and a levering tax based on an income to expenditure calcxulation. If you are disproportionately raking it in, you better be proportionately shelling it out. That's what currency is for.

[Deleted]

I would be in favor of gradually reducing it say every 5 years or so, until it is 0. completely aboloshing it may pull the rug out from under some people who bought, however wrongly, thinking that the mortgage deduction was a valid reason to buy a home.

Its kind of like changing the rules in the middle of the game.

[vl]

Its kind of like changing the rules in the middle of the game.

Read more: notmsnmoney.proboards.com/index.cgi?board=taxes&action=display&thread=399#ixzz19JpCyDWy

Prior to the passing of The Tax Reform Act in 1986, housing appreciated at a consistent rate and was a "house" not an investment vessel. You needed to keep it up or it failed to remain saleable at the current market and was a- handyman special. In the broad scheme of things this was a Birth, Growth, Maturity, Decline or Renewal Cycle that worked. If The Act had not passed, you and I would still have had sufficient deductions and Big Business would still pay taxes on windfall profits.
It's a FACT that The Act caused hyper-acceleration in values and gave birth to Big real estate franchises that homogenized property attributes where the uncared-for home went for the same price the prideful ownership ones went for and literally gave us-- Blight. When history looks back on this Crash, it will illuminate how inner city housing hyper-appreciated without improvements- caused by suburban investors kiting them. This would have never happened if cities conformed with the Community Reinvestment Act and held BANKS to an ethic standard.

Anyone buying a home today as an "investment" isn't smart. The top came off the market and without solid credit discipline offered by non-banks, banks can play this game all the way to ZERO value or worse... eliminate any saleability in the market.

TWO things We the People can lobby for is-- abolish the Tax Reform Act so Big Business can pay through the nose for eliminating jobs just to make more on old imported inventory, AND, demand Fixed Rate Fixed Term Fully Documented Credit-- ONLY. Doing so, forces all credit to align with wages and job (or job-less) security risks and to validate value. Once we validate value, we can rely on assets as collateral again and recover the whole economy.

[superintendent552]

The so called budget fixes need to be across the spectrum, rich to poor. Don't focus on the middle class to solve the Fed's budget problems. Entitlements for the poor to loopholes for the rich need work. We all need to ask, what we can we do for our country, don't we?

[suzwantstobefree]

Entitlements for the poor to loopholes for the rich need work.

I would love to see the entitlements for the poor re-worked. We should penalize those that aren't working at all and give more entitlements to the "working poor". Also, if we eliminated some of the fraud it would really save the country a lot of money.

[dancinmama]

We still have a pretty hefty mortgage, but I would love ANYTHING that simplifies the tax code. I agree that IF congress would ever consider getting rid of it, it should be phased out over time.

Wouldn't it be nice if we could come up with something (a new way of collecting revenue) so that we could get rid of the IRS?