Deducting home loan interest is trickier under new tax rules

Know your grandfather rule. Also, severe marriage penalty:

First, home buyers need to understand that deductions for mortgage interest are now capped at home acquisition debt of $750,000. This can add to the costs of buying homes in expensive housing markets where home prices top that number.

It’s interesting to note that the $750,000 limit applies to single taxpayers as well as married couples. According to a prior ruling of the Ninth Circuit Appeals Court, when two unmarried people buy a home together, they can combine their limits and deduct the mortgage interest on debt up to $1.5 million.

Time to divorce your partner to buy that 2.5M Sunnyvale house. :smile:

1 Like

Holy moly.
That’s a:

750000 * 0.04124 * 0.4 = 12372$ benefit at federal level?

Don’t forget state. Time to file your divorce paper and become friends with (hefty) benefits. :smile:


You are assuming people were already homeowners before the tax reform. What about the newbies that bought recently? They have nothing to compare against other than the standard deduction.

You are absolutely right with your second point. It’s the tech sector that drives bay area economy and housing.

Regarding your first point, most home owners in the bay area used to be under AMT, so were not getting state and local tax deductions. MID is grandfathered. So no surprises for existing home owners and in fact they will not sell unless they really have to. So less inventory.

1 Like

@harriet don’t ever get married. :smile:

The expansion of the child tax credit is huge for people with kids. It’s more money and they significantly increased the income limit.

Did you read @manch’s article? It says if the buyer entered into a binding contract before 12/16/17 but closed before 4/1/18 they can still deduct up to $1M in mortgage interest.

Just sleep together?

Appreciate at double digits?

Ain’t that already happening?

Friends with benefits is the biggest scam on the planet :unamused:

Ha! wish my kids felt that way. I suspect we’ll be buying two laptops and two phones in the next two years.

Don’t pamper your kids with material goods @Terri :slight_smile:

1 Like

Nahh, just making them take the city bus to/from school.

Anybody divorcing over this yet?

Is that so you can tell your wife others are doing it, so it’s a good idea?

nah, can never convince wife of that unless it’s more than 50-60K a year benefit (friends with benefit, lol).
I am just curious :slight_smile: