Mortgage Interest Deduction (2017) - Should they have ditched it?

Question

Why Republicans should have ditched the mortgage-interest deduction as part of tax reform

https://www.marketwatch.com/story/why-trump-should...

@Brandon Turner

@Allison Leung

Hi Brandon and Allison,

Can I propose a webinar topic for this looming new modification of our tax bill?

It's going to be a hot topic either way.

What say you?

Thanks and happy investing!

Chris Clark · Answer

I get the thought process of people wanting to be able to deduct their interest and I definitely understand why Realtors don't want this changed but I disagree on how big of an issue it will be. If you are being told to buy a larger home for a tax deduction that's not great advice to begin with. Everything I've seen on this so far will only have it affect people that owe more than $500,000 on a personal home they purchased after the bill was proposed in September. The median home price in the US according to the census is $312,800 as of October. With that in mind it won't affect the majority of homeowners.

I'm currently re-reading Set For Life right now and I couldn't agree more with the thought process of buying a house. You buy what you need not the best of what you can possibly afford. If you buy something over $500,000 because of your market maybe it's something you can house hack. Then it's possible you could get the full interest deduction because part of it is a rental and part of it is personal.

There's also the possibility it dies on the chopping block as it's not in the Senate bill currently to reduce it to $500,000. If the Senate can get a bill passed they still have to reconcile it with the House plan.