Big Bank gets big bucks.  Big Auto gets big bucks.  Big Insurance gets big bucks. What about Jane & John Homeowner?  You know, clients like yours’ and mine, quietly paying their mortgage every month on a home worth far less than they paid a year or two or three ago.  Often, their mortgage is greater than the home’s present value.  There are likely millions of homeowners who fall into this category.  They are struggling like the rest of us.  Who is looking out for them?  From what I can see, no one is.

Why not an Underwater Homeowner’s Tax Deduction?  Why not allow the homeowner to take a tax loss on their home based on an independent appraisal?  I think it is an idea worth exploring.  In a nutshell the program could work like this:

• The homeowner gets an independent appraisal (HVCC perhaps)
• The present appraised value is deducted from the original sales price
• The loss is taken all at once or over a 2-3 year period, taxpayer’s choice
• The new basis for the home is the new appraised value
• Future gains are based on the new basis

I propose this Tax Deduction be applied only to the taxpayer’s primary residence but would love to hear other idea’s.

Think about it, potentially millions of homeowner’s could get immediate tax relief which will directly benefit their household economy.  The tax effect is targeted directly where it is long overdue, for Jane and John Homeowner.  Do you know an elected representative who is willing to create and sponsor this legislation?

For the record, I was having a conversation with Debbie Taylor , a loan officer in Puyallup, Washington and she came up with this great idea.  She said it was ok with her if I wrote about it.  It is too good of an idea to keep below the surface.