The Tax Cuts And Jobs Act Real Estate Summary

Dated: 01/02/2018

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The Tax Cuts and Jobs Act Real Estate Summary


1.  Capital Gains Deduction 

      • No change

      • Must live in residence 2 of the 5 years 

      • Deduction still $250,000 for single, $500,000 for married persons

2.  Mortgage Interest Deduction (MID) 

      • Reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17 (not indexed for inflation)

      • Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap (not indexed for inflation)

      • Interest remains deductible on second homes which are subject to the $1 million / $750,000 combined total limits with primary residence

      • No deduction for interest paid on home equity or second mortgage debt through 12/31/2025 unless the proceeds are used to substantially improve the residence

3.  Deduction for State and Local Taxes

      • Deduction capped at $10,000 for the total of state and local property taxes AND income or sales taxes

      • Applies for both single and married filers and is not indexed for inflation

4.  Like-Kind 1031 Exchanges

      • No change to the rules for real property. 

      • Repealed the use of Section 1031 for personal property, such as art work, auto fleets, heavy equipment, etc.

For more specific income scenarios visit The Tax Cuts and Jobs Act - What it Means for Homeowners? 

If you have any questions in how this will specifically affect you please consult your tax advisor, for all your real estate needs contact us.

Nancy & David Legaz of Keller WIlliams Realty Landmark,  Lic. Associate Broker & R.E. Broker, manage a team of REALTORS® serving Manhattan, Queens & Nassau County since 1994.


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