IMPORTANT updates for Nevada Real Estate agents on 2013 Real Estate Provisions, Mortgage Debt Relief Act Extension and other significant Fiscal Cliff Legislation
On January 2, 2013, President Obama signed fiscal cliff legislation aimed at avoiding widespread tax increases and spending cuts. Following are some of the more important details of the bill that relate to Las Vegas Homeowners and Nevada Real Estate Agents:
Income Tax Rates: On income below $400,000.00 for individuals and $450,000.00 for couples the decade old tax cuts become permanent. Earnings above those amounts will be taxed at 39.6%, up from 35%. This legislation extends caps on itemized deductions passed in the Clinton era and a phase out of the personal exemption for individuals who make more than $250,000.00 and couples earning more than $300,000.00.
Estate Tax: For estates exceeding $5 Million ($10 Million for family estates) the tax rate will be 40%, up from 35%.
Capital Gains: Taxes on capital gains and dividend income exceeding $400,000.00 for individuals and $450,000.00 for families will increase from 15 percent to 20 percent.
Other Tax Issues: The child tax credit, earned income tax credit, and up to a $2,500 college tuition tax credit will be extended for five more years.
Social Security Payroll Tax: The payroll tax will increase to 6.2% which means every working person will pay more in taxes.
Mortgage Debt Relief Act: This act, set to expire at the end of 2012, will be extended through Dec. 31, 2013. The act waives forgiveness of mortgage debt on a homeowner’s principal residence from being counted as taxable income by the IRS. The maximum amount that can be treated as a qualified residence is $2 Million, or $1Million if filing separately. The extension of this act is very important to underwater Las Vegas homeowners who are trying to short sale their residences.
Other Real Estate Provisions: Deduction for mortgage insurance premiums for taxpayers making below $110,000 will be extended through 2013 and made retroactive to cover 2012 and the 10% tax credit (up to $500) for homeowners for energy improvements made to existing homes is extended through 2013 and made retroactive to cover 2012.
Our experienced Las Vegas Real Estate attorneys are available to help Nevada Real Estate Agents and Las Vegas Homeowners considering a Short Sale and/or seeking legal counsel. Please contact the Law Offices of Lee A. Drizin at 702-798-4955 or complete our online questionnaire at: https://www.drizinlaw.com/contact