Devil in the Deductions

If all 1040-Schedule A deductions, including the mortgage interest deduction are capped at about $35,000, then homeowners with houses priced north of $500,000 would be the ones primarily affected, and their homes would fall in value. Interestingly, they might respond by reducing charitable giving. If, however, the deductible amount is limited to 80% of total deductions, then all itemizers would be hurt, and many more houses would decline in price.