10-30-2005, 08:53 AM
| | Congress could take away mortgage interest and tax deductions from homeowners?
WASHINGTON — Is there really any chance that Congress could take away mortgage interest and state and local property and income tax deductions from homeowners?
A presidentially appointed bipartisan commission is expected to urge precisely that on Tuesday when it delivers its final report to the Bush administration. The mortgage-interest deduction, which allows write-offs on first and second loan amounts up to $1.1 million, would be scrapped and replaced with a 15% credit on sharply limited mortgage amounts. Deductions for state and local property and income taxes would be eliminated altogether. The 15% credit would only be for mortgages up to a $300,000 to $350,000 ceiling. Interest on home-equity loans no longer would be tax-deductible.
In exchange for these losses of tax benefits, the advisory panel would eliminate the alternative minimum tax, add $100,000 to the current $500,000 tax-free exclusion on home sale profits, lower capital-gains tax rates, cut the number of tax brackets and provide a variety of other simplifications to the federal tax code.
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