Tax Reform Bill Lowers Mortgage Interest Deductions
In late December, the U.S. House of Representatives and Senate passed the congressional tax reform bill. It was signed by President Trump and went into effect January 1. The final tax plan reduces the limit for the mortgage interest deduction from $1 million to $750,000 on mortgages for a first or second home and caps the deduction of state and local tax deductions, including property, sales, and income tax, at $10,000. The lower mortgage interest deduction cap punishes home buyers in high-cost states, such as California, and maintains provisions that weaken homeownership tax incentives.
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