We would like to wish everyone a Happy Holiday Season.  Happy Holidays, Merry Christmas, Happy Hanukkah (even though it is over) and a Happy, Healthy Prosperous and Loving New Year!!!

The deduction for property taxes is likely to be limited to $10,000 beginning in 2018. To the extent that you already have an assessment that isn’t due until after the first of next year, pay it by December 31. For taxpayers with high property tax bills and other large deductions such as mortgage interest and contributions, accelerating the 2018 property tax payment into 2017 may save a deduction due to disappear next year. Mid-range taxpayers may need a projection to see if this makes sense. And here again, the strategy won’t work for those in AMT in 2017.

Example. Sharon and Vern owe $12,000 in property taxes annually in two installments. They also pay $15,000 mortgage interest and donate $3,000 to charity. If they prepay in 2017 $6,000 property tax due in 2018, their itemized deductions will be $36,000 ($12,000 + $6,000 + $15,000 + $3,000). If they do this for 2018, they will only have $24,000 of deductions, ($6,000 + $15,000 + $3,000) the amount of the new 2018 standard deduction. If they don’t prepay, they will lose the benefit of $2,000 because they can only deduct a maximum of $10,000 property tax in 2018. With prepay, total two-year deductions are $60,000. Without prepay, total two-year deductions are $58,000.

Also, you can prepay the January installment if your mortgage before December 31, 2017 and deduct the interest on your 2017 Income Tax Return.  For 2018 the interest deduction for home mortgages will be limited to the first $750,000 of the mortgage.  So if your mortgage is over $750,000 you will want to take advantage of this provision.  Also, the tax rates will be lower for 2018 so you will get less benefit for the deduction.

For anyone who is interested I have a two-page summary of tax tips for the end of 2017.  Just contact me at my email address and I'll be happy to send it to you.

Many of you were around in the early 2000s when the real estate market collapsed.  We saw house prices take a tumble and we saw interest rates increase like we never saw them before.  People were being foreclosed upon left and right.  Guess What???  We are headed for an adjustment again.  This time the government should be a lot smarter.  It's not going to be as severe this time but it will affect decisions a lot of people will be making.  Can I afford these payments?  Will I get a mortgage?  Is now the right time to buy or sell?

From everything I have heard the adjustment will be coming in the later part of 2018.  So, with this information, make wise decisions concerning investing.  Seek out investment and real estate professionals to help you decide what your next move should be.  And, keep in mind, that President Trump will be signing some sort of new tax bill in the near future.

Have you got a crystal ball? That is what it might take to make the right decisions.  But, right now, we have to make decisions based on the current market conditions and the current tax law.  Guessing can get you in trouble but doing nothing could have the same effect.

I honestly wish that I knew what to tell you to do.  But, I can tell you this. do not just react to current developments.  Look to the advice of trusted professionals, set up a plan, set realistic goals but be flexible.  Do not do anything drastic.  Remember, this is an adjustment and over the long period of time capital investments and real estate will be solid investments!

Over a month ago I wrote a blog telling you to refinance NOW while the rates are still low.  Well, guess what. The rates are STILL low and purchasing and refinancing now are still great options.

 You know that he long term rates are not going to stay this low forever and there will be a time, in the not too distant future, where your options are going to go away.

Yes, house prices are rising. I see it every day. But as long as interest rates are reasonable you can still get into a great house with little down and a reasonable monthly payment. Many buyers are not putting down 20% any more. You don't have to with today's loan programs.

You are allowed to borrow from your deferred compensation plan (401k or other type plan)) for part of your down payment. For a home purchase, 50% of the balance of the 401k can be borrowed up to a maximum of $50,000. The interest you pay to the plan is not tax deductible but it does increase the amount of money in your deferred compensation plan. 
If you submit a purchase agreement when you take out a 401k loan the payback period can be 10 years instead of the legal or tax standard of 5 years.

Refinance now while the interest rates are still low. Even though the Federal Reserve raised rates those increases affect short-term rates.  Long term rates, namely mortgages, are still low and very reasonable.

Buy while the buying is good. The interest rates referred to above still give buyers an advantage and allow them to purchase more houses for the money. The same payment while interest rates are low will buy more house than if the interest rates are higher.

Get great service and more for your money now for "YOUR DREAM LUXURY HOME".