How the Fiscal Cliff Benefits Homeowners in Chicago

January 17, 2013

taxes imageThe fiscal cliff may have been avoided, but what exactly does this mean for homeowners?

First off, homeowners can now write off any insurance premiums as well as mortgage interest that they paid in 2012, as long as their household income does not exceed $110,000.

If you recently added any energy-efficient features to your home, the fiscal cliff will benefit you as well. For the years 2011 and 2012, you will be able to claim up to a $500 tax credit for a variety of eco-friendly additions.

Additionally, the fiscal cliff legislation will benefit those who are underwater on their mortgage. In 2007, Congress passed the Mortgage Debt Relief Act, which waived nearly $2 million in loan forgiveness taxes. The act was established to shield homeowners from taxes in the following situations:

  • A bank reduces the mortgage principle.
  • A borrower sells their home in a short sale and the purchase price is less than the remaining balance.
  • A bank waives the remainder of a mortgage that it couldn’t regain during foreclosure.

Had the fiscal cliff expired, thousands of homeowners would be forced to go through foreclosure or bankruptcy, but now those who are struggling will get a break in 2013.


About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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