Mortgage interest deduction could be eliminated - KWWL - Eastern Iowa Breaking News, Weather, Closings

Fiscal Cliff: Mortgage interest deduction could be eliminated as part of tax reform

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CEDAR FALLS (KWWL) -

For years, the home mortgage tax deduction has allowed homeowners, who itemize their taxes, to deduct the interest paid on their mortgages.

But as politicians discuss ways to fix the fiscal-cliff problem, some people worry this tax credit could be eliminated.

This is partially because it's the third largest tax deduction the government allows, according to tax experts at the Tax Policy Center.

"It's one of the few remaining deductible items that homeowners have today," said Bruce Wingert, co-owner of Cedar Valley Real Estate Solutions.

Wingert sells between 40-60 properties each year. He credits the tax break as a major incentive for home buyers.

"It's one of the factors as to why people purchase property and purchase their home versus renting. It drives the economy and everyone knows right now we need all the help we can get," said Wingert.

Wingert spent Thursday evening showing homes to Adam and Dawn Miltenberger who have spent the past four months searching for homes in the Waterloo/Cedar Falls area.

Wingert said most of his clients are like the Miltenberger's and qualify for the home mortgage tax deduction.

"It would really hurt my affordability to move and live in this area," said Miltenberger.

Politicians have been vague with whether the home mortgage deduction tax credit will be eliminated. There has also been talk in Washington of ending the Wind Production Tax Credit which is set to expire by December 31, 2012, as well as ending the Bush tax cuts.

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