John Bendall owner of Re/Max Classic Group offers some help with your 2007 taxes.

The Mortgage Forgiveness Debt Relief Act of 2007 is one of the laws that have been put into place in order to help alleviate some of the troubles of the mortgage and real estate industries over the past year or so.   It could have a significant impact on your 2007 tax preparations.  Specifically you may be able to deduct premiums for PMI, or private mortgage insurance, which were not deductible in the past. “One section of the new law extends until 2010 the provision that allows certain home and apartment owners to deduct from their federal income taxes the amount of the premiums they pay for private mortgage insurance.”

So if you recently purchased a home and perhaps bit off a little more than you can chew this law may provide a little bit of relief.  “The new law will help people who are on the cusp of home ownership by enabling them to lower the after-tax cost of owning a home,” said Jeff Lubar, a spokesman for the Mortgage Insurance Companies of America, an industry organization in Washington.”  If you are a potential buyer thinking about buying this year and are concerned that the dream may be just out of your reach, this law may bring it within your grasp.  The deductions for PMI will be allowed through 2010. 

There are some restrictions as to who is eligible to take the deductions.  They are limited to families with an adjusted gross income of $100,000 or less.   Partial deductions are available to families with incomes up to $109,000.  On average homeowners can save $350 each year.

There are other deductions allowed by the Mortgage Forgiveness Debt Relief Act of 2007 involving capital gains taxes, so check with your tax preparer to see how it affects you. If you have other questions or you are interested in buying or selling your home contact me at john@bendallgroup.com

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