There is no change as of now to the Mortgage Interest Deduction!
Capital Gains rate remains at 15% for incomes up to $400,000 for single filers and $450,000 for joint filers. Over those limits capital gains tax increases to 20%.
As a single filer selling your primary residence you are still entitled to $250,000 of tax free gain and $500,000 for joint filers.
Estate Taxes are exempt from estate tax if the estate is valued less than $5,000,000 for single tax filers and $10,000,000 for joint filers. Above those limits the tax rate increased to 40% from 35%.
If a portion or all of your mortgage debt was cancelled relief is extended through Dec. 31, 2013.
3.8% tax on investment income begins now. It applies to home sales, interest, dividends, capital gains and net rents. This is a very complicated tax. If you are selling your primary residence you are still entitled to the $250,000/$500,000 tax free. This affects only those with $200,000 of AGI or $250,000 for joint filers.
Mortgage Insurance premiums remain deductible for tax filers making less than $110,000.
15 Year Straight-line cost recovery on leasehold improvements is extended through 2013.
Energy Efficiency Tax credits remains in force through 2013.
For any of the above Tax issues, I strongly recommend speaking with your tax advisor.
New Rental Property Laws
AB 1679 – Allows return of security deposits directly to a bank account designated by the tenant.
AB 1925-Limits tenant relocation costs in San Francisco to $275.00 per day.
SB 1055- Prohibits a landlord from requiring Electronic Funds Transfers as the only type of payment.
SB 1229-Prohibits a landlord who allows a pet to require that the pet be declawed.
SB 1191-Requires a property owner (1-4 units) who has received a notice of default to inform a prospective tenant.
SB 1953-Prohibits a Landlord from proceeding with an eviction if the above notice compliance has not been met.
AB 2521-Increases the threshold for tenants’ abandoned property from $300.00 to $700.000 before requiring a Landlord to take additional steps to dispose of the property.
AB 1186- Eliminates frivolous suits over Building ADA Accessibility.
AB 2610- Requires a 90-day notice on month to month tenancy on foreclosed property and requires that a lease be honored to the end of its term, unless sold to a buyer who will occupy the home (some other exclusions apply)
AB 1394- Requires before Jan. 1, 2016 a smoke alarm be installed in each bedroom. As of Jan. 1, 2013
Carbon Monoxide Detectors are required in all Single Family and Multi-family properties.
On January 16, the South San Francisco City Council unanimously rejected a proposed ordinance mandating private property inspections before the city would allow residents to sell their home.
lee@leesellsmore.com
New Laws and Taxes for Home Owners and Investors for 2013
