This is a great summary of how the fiscal cliff changes affect real estate!

NAR Issue Brief

Real Estate Provisions in “Fiscal Cliff” Bill

On January 1 both the Senate and House passed H.R. 8, legislation to avert the “fiscal cliff.” The bill will be signed shortly by President Barack Obama.

Below are a summary of real estate related provisions in the bill.

Real Estate Tax Extenders

Mortgage Cancellation Relief

is extended for one year to January 1, 2014.

Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012.

Leasehold Improvements: 15 year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012.

Energy Efficiency Tax Credit: The 10% tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.


Permanent Repeal of Pease Limitations for 99% of Taxpayers

Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be reinstituted for high income filers. These limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000. These thresholds have been increased and are indexed for inflation and will rise over time. Under the formula, the amount of adjusted gross income above the threshold is multiplied by 3%. That amount is then used to reduce the total value of the filer’s itemized deductions. The total amount of reduction cannot exceed 80% of the filer’s itemized deductions.

These limits were first enacted in 1990 (named for the Ohio Congressman Don Pease who came up with the idea) and continued throughout the Clinton years. They were gradually phased out as a result of the 2001 tax cuts and were completely eliminated in 2010-2012. Had we gone over the fiscal cliff, Pease limitations would have been reinstituted on all filers starting at $174,450 of adjusted gross income.

Capital Gains

Capital Gains rate stays at 15% for those at the top rate of $400,000 individual and $450,000 joint return. After that, any gains above those amounts will be taxed at 20%. The $250/$500k exclusion for the sale of a principal residence remains in place.

Estate Tax

The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax. After that, the rate will be 40%, up from 35%. The exemption amounts are indexed for inflation.

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About erolbayraktar

Erol Bayraktar, BRE 00179251 Manager Coldwell Banker Previews International Irvine Erol Bayraktar brings with him a broad background as branch manager of the Coldwell Banker Quail Hill – Irvine office. Erol is an Orange County native and began his real estate career in 1994. Erol’s success and extensive experience in selling homes in the luxury market proves to be a cherished resource for Coldwell Banker agents. He has earned numerous top-producer awards with the successful completion of more than 100 transactions. Erol has an extensive track record of helping his agents achieve top producer status while utilizing his internet expertise, personal coaching, training and business development. He works constantly with agents to develop marketing materials and advertising programs that differentiate themselves in the marketplace and generate income-producing leads. He values the benefits that technology can provide to agents in order to help them become more efficient and more productive. “I constantly strive to take our sales associates and office to the next level. It is my goal for our customers to continue to be extremely satisfied with the services we provide through our professionalism, market knowledge, personal attention and complete family of services experience. It is my goal to help others enjoy the same levels of success that I have been fortunate to enjoy!” Coldwell Banker Quail Hill – Irvine agents benefit from a manager who is available 24/7 to assist with any situation. Erol provides backup for his agents with various situations in which they need advice or support. Prior Sales Manager Prudential California Realty Yorba Linda Erol Bayraktar brings a broad background to the job of managing an office. His Experience includes a track record of success in real estate as well as helping agents achieve top producer status as sales manager and trainer using his expertise in personal coaching and business development. Having grown up in Yorba Linda, Erol began his Real Estate career in 1994. Since then, he has constantly striven to work in the Luxury markets and higher end price ranges. Erol has been recognized by his former companies for his outstanding production in the luxury market. He has listed and personally sold homes up to $4.4 million dollars and managed listings for his team up to $11 million dollars. Erol’s extensive experience in selling estate homes will prove to be a wonderful resource for Prudential’s agents, who already have a strong presence with Fine Homes in Yorba Linda and across North Orange County. Rich Cosner, owner of Prudential California Realty, is thrilled to welcome such an exciting addition into his Prudential family. “Erol is a knowledgeable and very professional addition to our management team,” says Rich. “His experience in the high end price ranges makes him a perfect fit for our Yorba Linda branch. I am confident that his experience and background will be a tremendous advantage to our agents in our Yorba Linda marketplace!” Top Producer Experience As a native of Orange County, Bayraktar applies his impressive local market knowledge to his practice – which has earned him numerous top-producer awards and has ensured his successful completion of more than 100 real estate transactions. After spending the past two and a half years focusing on Luxury Estate Sales with the McMonigle Group, Bayraktar now brings his unwavering commitment to client service and proven sales talents to Prudential California Realty. Coaching & Training Agents for Success Erol is equally thrilled to work with Prudential California Realty and the Sales Associates in the Yorba Linda office, who have already been recognized as the top ranking real estate office for the area for all of 2009. “I look forward to taking the sales associates and the office production to an even higher level. It is my goal for our customers to continue to be extremely satisfied with the services we provide through our professionalism, market knowledge, personal attention, and complete family of services experience. I have always wanted to be in a leadership position where I can help others enjoy the same success that I have been fortunate to enjoy!” Availability 24/7 Agents in the Yorba Linda Office benefit from a manager who is available 24/7 to assist with any situation. Erol provides back up for his agents with various situations in which they need advice or support. A Passion for Excellence in Business Development, Technology and Marketing Erol works constantly with his agents to develop marketing materials that differentiate themselves in the marketplace and generate income-producing leads.

Posted on January 4, 2013, in Uncategorized. Bookmark the permalink. Leave a comment.

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