Agenda Summary National Association of REALTORS® 2012 REALTORS® Conference The Peabody Orlando Plaza International K , Convention Level Friday, November 9, 2012 1:30 p.m. - 4 p.m.
Chair: John Vranas, IL Vice Chair: Scott Griffith, MI Committee Liaison: Bob Kulick, CA Committee Executive: Linda Goold, DC
Purpose: To review scenarios related to various tax reform proposals
I. Call To Order
II. Approval of Previous Meeting's Minutes Conflict of Interest Policy
III. Unfinished Business A. Review Election Outcome
B. Scenarios for the Lame Duck Session Over the last twelve years, Washington DC has enacted a number of temporary tax cuts across numerous industries; including real estate. While Congress was enacting and extending these tax cuts the nation began its “war on terror” and fell into the “great recession.” These events along with a lack of fiscal discipline have increased government expenditures, as well as decreased government revenue. This increase in spending and loss of revenue has also led to an increase in the nation’s debt that has now made the budget and debt ceiling a focal point of election rhetoric.
Unlike in years past when Congress would temporarily extend various tax cuts for different lengths of time, and would be able to deal with increasing the debt ceiling at another date; the end of 2012 appears to be a culmination of all these issues
C. Mortgage Cancellation Extension Congress was unable to pass any tax extenders package prior to the end of their session. This will push any effort to extend the mortgage debt forgiveness relief, along with the approximately 60 other tax provisions expiring at the end of the year, to the lame duck session. It is simply unknown if Congress will be able to act this issue prior to the end of the year.
D. Regulations on the 3.8% Tax on Investment Income Beginning in 2013, the much publicized and often misunderstood 3.8 percent Medicare tax on unearned-taxable income will go into effect. While the application of this tax will utilize a complex formula, what is important to remember is it is applicable to:
• Households in the top two tax brackets (individuals with an income above $200,000 or $250,000 for married couples), • Applicable only on taxable unearned income, such as capital gains, interest, dividends and rents, • Capital gains exemption for principal residences ($250,000 for individuals and $500,000 for married couples) is not effected, and • Agents should have their clients contact their tax professional if they believe the new tax will impact them.
IV. New Business Speaker: Dr. Lin Smith, Price Waterhouse Coopers, Principal, Washington Tax Services. Dr. Smith will present a model that illustrates various outcomes of various tax reform proposals current in circulation.