William Rogers, The Extenders

The Bipartisan Budget Act of 2018 (BBA), signed into law on February 9, extends for one year a set of tax provisions, known as “extenders,” that expired December 31, 2016. Key provisions that have been extended include:

Exclusion Of Discharge Of Mortgage Debt

The BBA extends homeowners’ ability to exclude from gross income mortgage debt on a principal residence that was forgiven in 2017 (for example, as a result of a foreclosure, short sale or loan modification). It also modifies the exclusion to make it apply to debt discharged later than 2017 but according to a written agreement that was entered into in 2017. Without the extended provision, taxpayers would have to pay income taxes on the amount of mortgage debt forgiven.

Deductibility Of Mortgage Insurance Premiums

For 2017, taxpayers can continue to treat mortgage insurance premiums as deductible interest. However, the deduction phases out for taxpayers with adjusted gross income (AGI) of $100,000 to $110,000 ($50,000 and $55,000 for married couples filing separately) and is eliminated when AGI exceeds the top of the range.

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