Welcome to the AMM Law Blog, a tool to help you keep up to date on current legal developments over the broad spectrum of our practice areas. We welcome your comments and suggestions to create a dynamic forum that will be of interest to readers and participants.
Finally, Spring is here! It has certainly been a long, cold, snowy, and relentless winter. I want to take this opportunity to wish all of you a snow-free, warm and sunny Spring. As an employment lawyer, I'd like to do my part to help all of you employers maintain a care-free Spring mood by offering the following Spring cleaning checklist, which can protect your business from litigation and compliance risks.
In my prior installment of this series (Family Law Tip #2), I discussed the substantial reduction in the allowable amount of mortgage interest which is now tax deductible on any mortgage taken out after December 15, 2017. The 2017 Tax Cuts and Jobs Act reduced the deductible amount by $250,000 on homes purchased after the cut off date - capping the allowable interest deduction to mortgage principal of $750,000 (reduced from $1,000,000 prior to December 15, 2017). Beyond the lower mortgage cap, another big change is that, in general, the interest on home equity lines of credit is no longer deductible (with some very limited exceptions). This is true regardless of whether the home equity line of credit was taken out before or after the change in tax law.
These changes to the allowable mortgage interest deduction will have a bearing on the decision of divorcing parties as to whether to keep their second residence post-divorce. In the past, people often kept the second residence, in part knowing that they were able to deduct the mortgage and home equity line of credit interest on their tax returns and the maximum amount of $1,000,000 in indebtedness allowed for flexibility. In the advent of the Tax Cuts and Jobs Act, some will have to rethink this decision. If the expenses related to their vacation homes cannot be deducted, the cost to maintain the home will be higher.
While there was some back and forth in the various drafts of the tax code revisions, ultimately the deductions for the mortgage interest apply to both the primary residence and a second home as well. However, as stated above, the $750,000 cap makes it more likely that parties will not be able to deduct all of the interest on the mortgages for the primary residence and secondary residence when those amounts are combined. Consulting your attorney and accountant will help you to determine the actual increase in the cost of maintaining your vacation home so that you can make an informed decision.
Alan concentrates his practice in Estate Planning, Estate Administration, Elder Law, Estate…
Bill concentrates his practice in the area of litigation, including Commercial Litigation,…
Donald B. Veix, Jr
With over twenty-five years of experience, Don concentrates his practice in the…
Elizabeth J. Fineman
Elizabeth Fineman concentrates her practice on domestic relations matters and handles a…
Gabe’s practice focuses on litigation, including commercial litigation, personal injury, estate and…
Jamie Jamison is a supportive, knowledgeable advocate to clients experiencing the challenges…
Jessica A. Pritchard
Jessica A. Pritchard, focuses her practice exclusively in the area of family…
Joanne concentrates her practice in the areas of Business Law, Business Transactions,…
John’s concentrates his legal practice in estate planning, estate administration and elder…
Michael’s practice areas include Real Estate, Municipal Law, Zoning and Land Use, Employment…
Michael W. Mills
Mike is devoted to helping businesses build value and improve working capital,…
Patty has been practicing law since 1996 in the areas of Employment…
Stephanie M. Shortall
Throughout her career, Stephanie has developed a practice focused on advising closely…
Sue concentrates her practice primarily in general corporate transactional work and finance…
Thomas P. Donnelly
Tom’s practice focuses on commercial litigation and transactions. In litigation, Tom represents…