Mortgage Insurance premium is deductible

 

A break for borrowers (the few that qualify) paying a m0nthly mortgage insurance premium. President George W. Bush signed shortly before the close of 2006.

Some of the provisions:

One Year Term. The deductible applies only to Mortgage Insurance policies issued in 2007 for homes purchased in 2007. It doesn't apply to premium payments for policies issued before 2007.

Applicability. The deduction applies to private Mortgage Insurance, and to FHA, VA, and Rural Housing Service premiums as well. The mortgage insurance premium amount is to be treated as mortgage interest.

Income Eligibility. The new deduction is available only to individuals or families with less than $100,000 adjusted gross income (AGI) on a joint or single tax return ($50,000 for married filing separately).

Premium prepayment. Individuals who claim the deduction are not permitted to prepay premiums that are otherwise due after 2007. The provision expires for any premium payment that's paid or that accrues after Dec. 31, 2007.

Mortgage Prepayment. If a mortgage (other than a VA, FHA, or RHS mortgage) is prepaid during 2007, the unamortized premium balance on that mortgage isn't deductible. (The unamortized premium balance is the amount of premium that would have been paid in a particular year if the payments had extended throughout that year.)

Notification. The home owner is supposed to receive a statement from either the  lender or the mortgage insurance provider stating the proper amount of the mortgage insurance deduction. That information will also be provided to the IRS.

Given it's one-year authorization and limited applicability, it's not known when or if the IRS will provide additional guidance for the deduction. How'd yah like them apples!

For professional advise on all aspects of buying or selling Real Estate, please contact me Richard Recuset at-786-287-9272 -email: BailOutCentral@yahoo.com
The Recuset Group