Jan
08

Declining Deductions

With passage of the American Taxpayer Relief Act of 2012 (the fiscal cliff bill), the residential real estate industry dodged a bullet. While Schedule A deductions are phased out for couples with incomes above $300,000, the phaseout is mild. A couple with $500,000 of income would be $200,000 over the $300,000 limit. Thus, their deductions fall by 3% of the $200,000 overage, ($6,000), which raises their taxes by about $2,400.

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