Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions

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Anonymous_IHB

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<A href="http://economix.blogs.nytimes.com/2009/02/24/killing-or-maiming-a-sacred-cow-home-mortgage-deductions/?em">http://economix.blogs.nytimes.com/2009/02/24/killing-or-maiming-a-sacred-cow-home-mortgage-deductions/?em</A>
 
lol, would have been nice 8 years ago.



Too late for that. The only way Bush and now Obama have to fix this mess is to make a 2006 million dollar house worth only 500k (in year 2000 dollars)...part market reset and part inflation.
 
Similarly, one has to think that deep in the bowels of the Treasury Department, someone is re-thinking the capital gains exclusion for the sale of a house. A single person gets to keep the first $250,000 in long-term capital gains on a home sale, without paying taxes on it. A married couple gets $500,000 in tax-free gains. Now would be a good time to eliminate that exclusion, since fewer people have capital gains to "worry" about. Full Disclosure: I took advantage of that provision of the tax code back in 2004 when I sold my home. My tax guy recommended I find a bride. I assured him it would not be worth it as no wife could put up with me.



The original intend of the exclusion was to help adjust for inflation. My point is not whether or not to have long-term capital gains taxed, just to opine that this highly targeted exclusion seems unfair. If I own a house for two years or more, I don't pay tax on the first $250,000 of the gains. But if I buy a stock and keep it for the long term, I have to pay capital gains on all of the gains.
 
[quote author="GoIllini" date=1235788502]Similarly, one has to think that deep in the bowels of the Treasury Department, someone is re-thinking the capital gains exclusion for the sale of a house. A single person gets to keep the first $250,000 in long-term capital gains on a home sale, without paying taxes on it. A married couple gets $500,000 in tax-free gains. Now would be a good time to eliminate that exclusion, since fewer people have capital gains to "worry" about. Full Disclosure: I took advantage of that provision of the tax code back in 2004 when I sold my home. My tax guy recommended I find a bride. I assured him it would not be worth it as no wife could put up with me.



The original intend of the exclusion was to help adjust for inflation. My point is not whether or not to have long-term capital gains taxed, just to opine that this highly targeted exclusion seems unfair. If I own a house for two years or more, I don't pay tax on the first $250,000 of the gains. But if I buy a stock and keep it for the long term, I have to pay capital gains on all of the gains.</blockquote>


Losses on the sale of stock may be deducted as capital losses, short or long term.

Losses on the sale of a personal residence may not be deducted as any type of loss, capital or otherwise.

If you sell your car for a gain, you are required to pay cap gains tax, but if you sell for a loss, no deduction.

Tax treatment is different for many, many assets.

If you want consistancy ...
 
[quote author="awgee" date=1235795957][quote author="GoIllini" date=1235788502]Similarly, one has to think that deep in the bowels of the Treasury Department, someone is re-thinking the capital gains exclusion for the sale of a house. A single person gets to keep the first $250,000 in long-term capital gains on a home sale, without paying taxes on it. A married couple gets $500,000 in tax-free gains. Now would be a good time to eliminate that exclusion, since fewer people have capital gains to "worry" about. Full Disclosure: I took advantage of that provision of the tax code back in 2004 when I sold my home. My tax guy recommended I find a bride. I assured him it would not be worth it as no wife could put up with me.



The original intend of the exclusion was to help adjust for inflation. My point is not whether or not to have long-term capital gains taxed, just to opine that this highly targeted exclusion seems unfair. If I own a house for two years or more, I don't pay tax on the first $250,000 of the gains. But if I buy a stock and keep it for the long term, I have to pay capital gains on all of the gains.</blockquote>


Losses on the sale of stock may be deducted as capital losses, short or long term.

Losses on the sale of a personal residence may not be deducted as any type of loss, capital or otherwise.

If you sell your car for a gain, you are required to pay cap gains tax, but if you sell for a loss, no deduction.

Tax treatment is different for many, many assets.

If you want consistancy ...</blockquote>


.. try homogenized milk? :)
 
I can't believe (or maybe I can) how many people on JtR's site and the OCR site are whining about this.



Someone posted that it was $250/month on a $1M mortgage@6%.



We should just eliminate the MID, and stop subsidizing taking on debt.
 
It's about $50/thousand dollars of MID. Or just a measely $3000.



I suspect the real concern is that to be affected by this one is already paying $45,000 in Federal Income tax alone.
 
<blockquote>Similarly, one has to think that deep in the bowels of the Treasury Department, someone is re-thinking the capital gains exclusion for the sale of a house</blockquote>


I am amazed that it has lasted this long. I would think the Obama types will either reduce the amount or extend the period to 5 or 7 years.



That is just way too much money for an average citizen to make without paying taxes on.



For married couples it is a cool half million.



Sure glad that I did it several times in the last 10 years. ;-P



They have started reducing the amount by the years that a house was rented prior to being turned to primary residence.



awgee may want to explain the details of this one.



enjoy!
 
This plan has me upset more than any other. While all of these pathetic douche bags that can't run a company or cover their mortgage are getting bailouts, people like myself, who followed the fu**ing rules for years and saved and scrimped and planned in accordance with the rules, stand to get screwed no sooner than we "made it." Total fu**ing bullshit. What a wonderful administration - keep proposing penalties for those that actually followed the rules and figured out a way to succeed... and then change the game just to screw them out of their accomplishments and provide health care and all sorts of other handouts to people who were either careless, lazy, or cheated the whole damn way. I am getting so sick of this. Nice society.
 
bad and irresponsible behaviour: rewarded

good and responsible behaviour: punished



i'm just gonna stop paying my mortage and stop working too, because: i get better mortgage terms, my balance will be reduced and i get a "stimulus" check and any other goodies they might come up with to reward lazyness and iressponsibility
 
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