Tax News

CCH (cch.taxgroup.com) reports:

  Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member Charles E. Grassley, R-Iowa, unveiled the Alternative Minimum Tax and Extenders Tax Relief Bill of 2008 on April 17, which would extend a series of expired or expiring tax breaks, provide an expanded one-year patch for alternative minimum tax (AMT) and allow the use of personal credits against the AMT. The lawmakers did not provide revenue tables indicating how the cost would be offset, but it is expected that the Finance Committee will take up consideration of revenue offsets in the near future.

  The proposed legislation would extend popular tax breaks that include the research and development credit, deductions for state and local taxes, college tuition tax credits and a number of renewable energy tax credits. "This legislation is very important," said Grassley. "If expiring tax provisions are not extended, Americans will be hit with big tax increases, and it will happen without a vote of Congress." The AMT provisions would have the greatest impact on taxpayers, because they increase the personal exemption amounts to $46,200 (for individuals) and $69,950 (for married couples filing jointly) for 2008. The proposal would also allow the use of personal credits against the AMT, which is not allowed under current law.

  The energy provisions would extend the renewable electricity and refined coal production credit, add $400 million to the clean renewable energy bonds (CREBs) program, extend the credit for residential energy efficient property and business energy credit, and extend the deduction for energy efficient commercial buildings. Business extenders under the measure include a one-year extension of the cost recovery of certain leasehold improvements and restaurant property, extension of the exception under Subpart F for active financing income, the new markets tax credit, the tax credit for certain expenditures for maintaining railroad tracks, the look-thru treatment of payments between related controlled foreign corporations under the foreign personal holding company rules, and qualified zone academy bonds.

  By Jeff Carlson, CCH News Staff

SFC Release: Statement of Sen. Max Baucus on the Introduction of Tax Extenders Legislation

SFC Release: Baucus-Grassley Bill Blocks Alternative Minimum Tax for More Working Families, Extends Energy Incentives, Individual and Business Tax Relief

Alternative Minimum Tax and Extenders Tax Relief Act of 2008.