Whether you’re buying or selling a home in Knoxville, there are many beneficial tax breaks to being a homeowner. Unfortunately, for many Tennessee residents, some of these popular tax breaks are set to expire at the end of the year. So, what real estate tax breaks are set to expire? And, will they be extending to 2014?
Mortgage Insurance Premium Deductions
For many Knoxville buyers, FHA, VA, and Rural Housing loans are among very popular loan programs. If you buy a Knoxville home with one of those loan programs, you are required to pay a mortgage insurance premium. Since 2007, many Tennessee homeowners have been also to deduct that insurance premium come tax time. If this deduction is not extended, any mortgage insurance accrued after December 31st will not be eligible for the deduction.
Mortgage Debt Forgiveness Act
For Knoxville distressed homeowners, the Mortgage Debt Forgiveness has been a saving grace. For Knoxville homeowners, who go through foreclosure, short sale, deed-in-lieu of foreclosure, or a loan modification, the Debt Forgiveness Act has allowed them not to pay income tax on forgiven debt if the home is not their principal resident. If the act is not extended, any Tennessee homeowner will be stuck paying income taxes on any forgiven debt at of January 1st.
Energy Efficient Tax Credit
Homeowners who install energy efficient windows, doors, roofs, insulation in their primary residence were eligible for an up to $500 tax credit. This tax credit will expire at the end of the year unless the tax break is expended.
As far as if and when these tax breaks will be extended, it is always hard to say what the White House and Congress will do. Luckily, for the Knoxville real estate market, these tax breaks are popular and many of them will likely be extended at some point in time.
Are you planning to buy or sell your Knoxville home this year? If there is anyway Knoxville Home Team can assist you, please let us know, you can give Rick at call at 865-696-9002 or send an email to [email protected]. Kati can be contacted at 865-392-5880 or via email at [email protected].