Homeowner Tax Code Changes
1. Mortgage Interest Deduction - For most folks, this is still a deduction. The new code does limit the interest on the debt to $750,000 instead of $1 million for homes purchased after December 15, 2017.
2. Property Tax Deduction - The amount that someone can reduce their taxable income by is now limited to $10,000 for the cost of property taxes, and state and local income taxes or sales taxes.
3. Home Equity Deduction - The new tax code eliminates interest paid on a home equity line of credit debt.
4. Mortgage interest deduction for second homes - Homeowners can still deduct the mortgage interest on a second home subject to limits on #1 above.
5. Moving Expenses - Former law allowed deduction of some moving expenses for a new job. Beginning in 2018, only active duty military can take this deduction.
6. Captial Gain Rule - The amount you can exclude still is $500,000 (married couples / $250K for singles) and remains unchanged on only needing to have used the home as a primary residence for two of the past five years and not using this exclusion in the two years before the sale of the home.
7. Casualty Losses - are only allowed on losses attributable to a presidentially declared disaster.
Not addressed in the new tax code is the Mortgage Forgiveness Relief Act of 2007 that expired on 12/31/2016 which gave tax relief for folks who had mortgage debt discharged for a foreclosure, short sale or other mortgage forgiveness.