The American Jobs Creation Act of 2004 was signed into law recently but some homeowner-friendly provisions didn’t make the final cut.
Lawmakers tossed a provision that would have allowed homeowners earning $100,000 or less to deduct mortgage insurance premiums from their income taxes. More than half of African-American, Hispanic, and low-income borrowers are forced to carry mortgage insurance from FHA, VA, or private-sector providers because they were unable to make the standard 20-percent down payment.
Tax deductibility for mortgage insurance was approved by the Senate and largely supported in the House while also earning the endorsement of several trade groups and consumer organizations, but it did not make it into the final bill.
Legislators did, however, quietly pass a law that prevents property owners from deferring capital gains taxes by converting investment real estate into principal residences without living in the homes for at least five years.