Debt panel to propose scaling back home-mortgage tax relief

12/2/2010 | CNNMoney

The presidential commission charged with finding ways to reduce the federal deficit has proposed eliminating the federal tax deduction for interest payments on home mortgages up to $1 million and home-equity loans up to $100,000, provisions that cost the government $131 billion a year. Instead, the panel recommends a 12% nonrefundable tax credit for mortgages up to $500,000, and no tax relief for second mortgages or home-equity loans. Housing-industry groups adamantly oppose such a change, saying it would hurt their industry's faltering recovery.

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