By Miriam Perlmutter, REALTOR (B), BIC – Taken from a recent article by the National Association of Realtors, below are the real estate provisions as highlighted in the “Fiscal Cliff” Bill passed through congress on January 1st and signed into law by President Barack Obama the following day.
Real Estate Tax Extenders
The following is extended through 2013:
- Mortgage Cancellation Relief
The following are extended through 2013 and made retroactive to cover 2012:
- Deduction for Mortgage Insurance Premiums for filers making below $110,000
- 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties
- 10% tax credit (up to $500) for homeowners for energy improvements to existing homes
Permanent Repeal of Pease Limitations for 99% of Taxpayers
“Pease Limitations” — that reduce the value of itemized deductions — are permanently repealed for all taxpayers with the exception of those individual filers earning more than $250,000 and joint filers earning above $300,000.
For those affected, the amount of adjusted gross income above those thresholds is multiplied by 3% and used to reduce the total value of the filer’s itemized deductions, with the total amount of reduction not exceeding 80% of the filer’s itemized deductions.
Initiated in 1990, continued through the Clinton years, and gradually phased out as a result of the 2001 tax cuts, “Pease Limitations” were completely eliminated in 2010-2012.
Capital Gains rate stays at 15% for those in the top rate of $400,000 (individual) and $450,000 (joint) return. After that, gains above those thresholds are taxed at 20%.
The first $5 million in individual estates and $10 million for family estates are now exempted from the estate tax. Due to inflation, the rate has increased from 35%-40% for estates above those thresholds.Learn more about these provisions.
As the Broker-In-Charge of Kauai’s north shore operations, Miriam Perlmutter is tasked with overseeing some of the top real estate brokers in the State of Hawaii, and hundreds of millions of dollars in sales each year. Her real estate sales career has been centered in team-work, asset management, negotiation and sales. She holds a bachelor’s degree in computer graphics and has over a decade of hands-on experience creating successful marketing materials. Miriam’s expertise in technology, design, and marketing are a natural fit at Hawaii Life, along with her talent for developing creative solutions to the market’s challenges. She handles a high-volume of clients with a systems-oriented approach, giving each individual client the attention and service they need. Miriam lives in Princeville Resort on Kauai’s north shore with her husband Jack and their daughter Isabella.