Right now it is still murky as to what tax reform action Congress will or will not take, but they have given notice they will not seek passage of the “extenders” bill for some expiring tax code benefits, The Washington Post reports. The Washington Post also takes a look at some proposals in the Senate that could try to eliminate the 1031 exchange provision used by many real estate investors.
The failure of tax writers to put together an extenders bill means that important Internal Revenue Code provisions affecting large numbers of homeowners — especially relief from taxation on mortgage debt forgiveness by lenders in most states, along with current deductions for mortgage insurance premiums and energy-saving home improvements — will lapse Dec. 31, the Post reports, except for California.
Senate tax writers’ reform-bill proposals for real estate should be unsettling for anyone owning residential investment property, such as rental houses, the Post reports.
Senate Finance Committee Chairman Max Baucus (D-Mont.) would terminate one of the oldest financial planning techniques used by real estate investors: tax-deferred exchanges under Section 1031 of the code. Read more here on the proposed changes being discussed and how it could impact the smaller investor.