House-Passed Tax Bill Includes MI Deduction

The House has passed a controversial tax bill that combines a reduction in estate taxes with an increase in the minimum wage along with several popular tax extensions and new tax breaks, including a mortgage insurance deduction.Members of the House passed the tax bill by a 230-180 vote early July 29 just before leaving Washington for their usual August recess. Observers expect strong resistance in the Senate, which could postpone a vote on the tax bill (H.R. 5970) until September. The Senate is scheduled to adjourn at the end of this week. The MI provision would allow homebuyers with less than $100,000 in income to take a full deduction for mortgage insurance premiums paid on government and privately insured loans. If passed, the MI deduction would expire after one year. But Congress generally extends such provisions each year. Sen. Gordon Smith, R-Ore., has sponsored the MI deduction for several years -- only to see it dropped from tax legislation just before final passage. The private mortgage insurers are hoping this year will be different.