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Don DeKraker and Lisa Russo

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Your Connection to

West Michigan Real Estate

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CONGRESS PASSES NEW MI TAX-DEDUCTION LEGISLATION.

 

On December 9, 2006, new legislation was passed to allow qualified borrowers with adjusted gross incomes under $100,000 to deduct 100% of their borrower-paid mortgage insurance premiums on their federal tax returns.*

The provision is effective for new purchase transactions closed after December 31, 2006.  MI premiums paid between January 1 and December 31, 2007 may qualify for tax deductibility on borrowers’ subsequent federal tax returns as follows:

 

·       Borr     borrowers with adjusted gross incomes below $100,000 may deduct 100% of their MI premiums.

 

·       For      adjusted gross incomes between $100,000 and $109,000, deductions are phased out at 10%             increments.

 

 

“We congratulate Congress for helping low- and moderate-income Americans overcome barriers to homeownership. By making mortgage insurance tax-deductible, Congress is addressing the key issue of housing affordability for many homebuyers.”