Questions on PMI/Single Payment PMI - Still Tax Deductible in 2017?

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patriciamgr2
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Questions on PMI/Single Payment PMI - Still Tax Deductible in 2017?

Post by patriciamgr2 » Fri Dec 30, 2016 10:27 pm

I believe the PATH act provided for PMI to be deductible in 2016, but I can't find whether that is scheduled (or even expected) to be extended for subsequent tax years. Any thoughts, Forum members?

If the extension is for 2017 only, would it make sense for someone taking a new mortgage to prepay PMI to ensure the tax deduction?

Also, is it still difficult to have PMI removed? In the past, I've heard of lenders requiring a certain number of months' insurance payments despite valuation increases, and requiring the borrower to use bank-approved (lowball) appraisers.

[The poster asking about mortgages makes under $60K assuming he doesn't increase his taxable income by doing taxable withdrawals from his qualified savings plans. He asked questions about 5% down mortgages in another thread which morphed into us trying to redesign his life for him :) , so I'm starting a separate topic.]

I'm grateful for any assistance from Forum members. BTW, Happy New Year to all.

Regards, Patricia

TOJ
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Re: Questions on PMI/Single Payment PMI - Still Tax Deductible in 2017?

Post by TOJ » Fri Dec 30, 2016 10:32 pm

What do you mean "prepay" PMI? Do you mean pay a bunch of monthly premiums right now? Or, do a single-payment PMI?

Read this on deducting single-payment PMI: https://ttlc.intuit.com/questions/19264 ... e-premiums
So you won't be able to deduct the full monty this year, if that's what you wanted.

Note, they're been extending PMI deductibility for years. Always an 11th hour political battle and then it gets done. So although it's not a lock to stick around, it will take some real gall to get rid of that deduction.

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patriciamgr2
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Re: Questions on PMI/Single Payment PMI - Still Tax Deductible in 2017?

Post by patriciamgr2 » Fri Dec 30, 2016 10:44 pm

I believe the OP in the other thread received a quote on single payment PMI - so based on the link you cited, it would need to be deducted over 7 years. And, I assume that doing a single-pay would be no "lock" on tax deductibility in future years if the tax provision changed. So, it doesn't appear there are any tax-related reasons to favor a single pay PMI.

Thanks so much for the prompt response.

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