Tax Reform is underway
on Capitol Hill. The Senate has adopted a “Blank Slate” approach that initially
eliminates every provision in the tax code, including those that encourage real
estate ownership and investment.
Senators must submit their tax reform priorities to Senate leaders by July 26th. REALTORS® need to make their voices heard now so real estate provisions are on the top of the Senators' lists.
When approaching tax reform, Congress should be careful not to inflict adverse consequences on either the economy or the unique legacy that homeownership and real estate investment have contributed to making our country prosperous.
Senators must submit their tax reform priorities to Senate leaders by July 26th. REALTORS® need to make their voices heard now so real estate provisions are on the top of the Senators' lists.
When approaching tax reform, Congress should be careful not to inflict adverse consequences on either the economy or the unique legacy that homeownership and real estate investment have contributed to making our country prosperous.
On June 27th the Chairman of the Senate Finance Committee, Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) announced their plan for tax reform legislation in the United States Senate.
There are a wide range of provisions in the tax code that affect residential,
What is the "Blank Slate"?
A “blank slate” means that as a starting
point, all tax expenditures (including tax deductions such as the mortgage
interest deduction, tax exemptions such as the capital gains exemption on the
sale of a primary residence, and tax credits such as energy efficiency tax
credits) will be removed from the tax code.
Senators will have to request tax expenditures be added to the reform legislation. Using the “blank slate” approach allows the Senate Finance Committee to highlight the just how much tax rates could be reduced by eliminating all the tax expenditures. Adding any tax expenditures back into the code would ratchet the rates up.
Senators will have to request tax expenditures be added to the reform legislation. Using the “blank slate” approach allows the Senate Finance Committee to highlight the just how much tax rates could be reduced by eliminating all the tax expenditures. Adding any tax expenditures back into the code would ratchet the rates up.
At the very least, we need to urge our Senators to maintain, and in some cases improve, the following provision in any rewrite of the tax code:
- The mortgage interest deduction should be preserved in its current form and the limits indexed for inflation.
- The exclusion of capital gains on the sale of a principal residence should be preserved and the limits indexed for inflation.
- The deduction for property taxes paid should be preserved.
- The temporary exclusion of income from discharge of mortgage debt (mortgage cancellation) should be made permanent.
- The depreciation periods of commercial and residential buildings should be shortened to reflect the true useful lives of these assets. The temporary provision allowing faster write-off for leasehold improvements should be made permanent.
- Provisions that allow for the deferral of gain on the like-kind exchange of real property should be maintained.
Our
nation's real estate markets are finally on the road to recovery. One of the
surest ways to halt this recovery is to create uncertainty about whether the
current tax treatment will be eliminated or impaired for real estate owners and
investors.
Congress must be mindful of the broad impact that the overnight
elimination of long-standing and widely utilized tax provisions may have on our
nation's economy.
Take further action by visiting www.taxreform.gov and tell Congressional leaders why eliminating real estate tax provisions could stop our real estate recovery.
Please
join me in telling the Senate to stop the elimination of real estate tax
provisions.
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