Home Mortgage Tax Incentives Under Review

[jeffrey]

President Bush's bi-partisan tax-reform panel - which is in charge of making proposals on reforming the tax code and whose recommendations are taken seriously by Congress - is considering recommending a number of proposals that would make the current home tax deductions less friendly. The panel is attempting to preserve tax incentives to buy a home, but looking at changes which it feels will address issues of fairness and economic growth.

While the panel hasn't stated what exactly they will recommend, some of the options they are considering include:




** The current home mortgage deduction extends to $1 million. They may recommend to reduce this to a lower amount and have the mortgage size vary by region depending on the area's home prices.

** Scrapping the current home mortgage deduction and replacing it with a tax credit. This would allow all homeowners a tax break, not just those that itemize their deductions.

** Lowering the tax rate at which mortgage interest may be deducted.

** Lowering the total capital gains exempted from tax.

** Combining two or more of these.