No Tax Break for Payers Of Mortgage Insurance
It was almost, but not quite enough, this week on Capitol Hill. Millions of moderate-income and first-time home buyers almost received a major new deduction from the giant federal tax-cut package under consideration by Congress.</br></br>But in the end, a Senate-approved new tax rule allowing more than 10 million home-mortgage borrowers to take deductions on their monthly mortgage insurance premiums did not make it into the final compromise package.</br></br>Supporters, including civil rights, union, housing and mortgage industry groups, say they'll try to get the plan included in any follow-up federal tax legislation that Congress takes up later in the year.</br></br>Here's what happened: The Senate's original tax-reduction bill included a major reversal of decades-long IRS policies on mortgage- related write-offs.</br></br>It would have allowed home buyers and owners who pay Federal Housing Administration mortgage premiums, private mortgage insurance premiums, or other forms of mortgage insurance to begin taking write- offs on those payments immediately.