2018 Tax Law Implications for Real Estate

Follow up to May 3, 2018 Facebook Live training

Some things remained in place from the previous tax bill to the new one:
• Capital Gains Exclusions on sale of a primary residence. This remains at
$250k for individual filers and $500k for joint if you have lived in the
property at least 2 of the past 5 years. There was a proposal that nearly got
passed changing this from 2 of 5 to 5 of 8!
• Like-Kind Exchanges, or 1031 Exchanges, remain the same as well, at least
for real estate! While some items have dropped off, real estate is still
eligible. 1031 exchanges allow for tax deferral on investments by selling
something and using the proceeds to buy a new one, with requirements for
identifying the replacement property within 45 days and purchasing the
replacement property within 180 days.

Some things changed:

• Mortgage Interest Deduction on Primary Residences: Previous bill allowed
for interest on the first $1 million of your mortgage to be deductible. New
bill reduces this to the first $750,000.
• SALT (State and Local Taxes) and Property Tax deductions are now capped
at $10,000.
• Standard Deduction nearly doubled to $12k for individuals and $24k for
joint filers
• Personal Exemption has been repealed

While the new bill is overall NOT real estate friendly (less incentive to itemize
deductions and therefore the tax benefits of homeownership may not be as much
or exist at all to many people), the bill does favor states like Florida where we
have no State Income Tax and we have lower property values and taxes.

Let’s look for ways to capitalize on these new tax changes!

For internal use only by agents and employees of Casa Fina Realty. Not intended as legal or tax advice, and this
information should not be construed as such. Always advise clients to seek their own professional advise on these
matters as each individual’s situation is unique.