Here is a brief summary of the new tax laws as they relate to real estate:
The mortgage interest deduction has been lowered: The tax bill allows taxpayers with existing mortgages to continue to deduct interest on a total of $1 million of mortgage debt for a first and second home. For new buyers, the $1 million limit drops to $750,000. Mortgage interest on home equity loans or second mortgages will no longer be deductible unless the funds are used to “substantially improve the property”.
Rules for 1031 like-kind property exchanges will remain the same for real property. Unfortunately deductions for automobiles, artwork and construction equipment have been repealed. The state and local tax deduction now has a cap: you will now only be allowed to take an itemized deduction of up to $10,000 for the total of state/local property taxes, income or sales tax.
Read on…New Tax Laws 1.2018