How “fiscal cliff” deal affects homeowners

Here’s a quick look at how the “fiscal cliff” deal passed by Congress on New Year’s Day 2013 affects homeowners (for now):

• current tax rates for all households earning less than $450,000, and $400,000 for individual filers remain in effect;

• the tax rate on capital gains also remains the same, at 15 percent, for most households, but for those earning above the $400,000-$450,000 threshold, the rate rises to 20 percent;

• the exclusion from taxes for gains on the sale of a principal residence of up to $500,000 ($250,000 for individuals) remains in effect (subject to limitations);

• personal exemptions and deductions are phased out for incomes over $250,000 for singles and $300,000 for couples;

• mortgage cancellation relief for home owners or sellers who have a portion of their mortgage debt forgiven by their lender, typically in a short sale or foreclosure sale for sellers and in a modification for owners is extend through 2013;

• deductions for mortgage interest, mortgage insurance premiums and state and local property taxes, are extended;

• the alternative minimum tax (AMT) is permanently adjusted for inflation; and

• estates will be taxed at a top rate of 40 percent (up from 35 percent), with the first $5 million in value exempted for individual estates and $10 million for family estates.




Douglas S. Tingvall

Attorney at Law

8310 154th Ave SE

Newcastle WA 98059-9222

425-255-9500/Fax 425-255-9964

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