Tax News

CCH (cch.taxgroup.com) reports:

  The Senate, on July 26, passed the Foreclosure Prevention Act of 2008 (HR 3221) by a vote of 72 to 13. The comprehensive housing legislation contains a $15.1 billion tax package, the Housing Assistance Tax Act of 2008, that is fully offset. President Bush indicated that he will sign the measure into law.

  The major revenue offset for the tax package, which is fully paid for, would require credit card information return reporting by merchants that would raise $9.082 billion. It would delay the implementation of worldwide allocation of interest rules and raise $7.322 billion. Part of that revenue would cover some of the cost of the $3.9 billion Community Development Block Grant program The bill would also raises $1.394 billion by modifying the exclusion of gains on the sale of a principal residence.

  The tax incentives include a refundable first-time home buyer credit estimated to cost $4.853 billion over 10 years, an additional standard deduction for real property taxes that would cost $1.537 billion, and a plan to simplify and increase the low income housing tax credit program and the tax exempt bond program at a cost of $1.946 billion. The measure also provides a temporary increase in mortgage revenue bonds ($1.475 billion), alternative minimum tax relief for housing programs ($2.093 billion), and treats certain federally guaranteed municipal bonds as tax exempt bonds ($126 million).

  In addition, the legislation would protect Social Security numbers in real estate transactions ($20 million), encourage the rehabilitation of government-leased buildings ($96 million), and reform rules for real estate investment trusts ($359 million). The package also includes a plan to expand the Gulf Opportunity Zone tax incentives ($1.333 billion) and allow taxpayers to accelerate the recognition of historic alternative minimum tax and research and development credits ($966 million).

  "This is an enormous win for millions of American families facing foreclosure and for our housing sector at the core of this economic downturn, "said Senate Finance Committee Chairman Max Baucus, D-Mont., following the vote. "It took ingenuity and great cooperation, and today I'm pleased to say that we passed a bill that will bring property tax relief to tens of millions of homeowners, help refinance subprime loans, and reduce the number of vacant homes on the market, "said Baucus.

  By Jeff Carlson, CCH News Staff

SFC Release: Summary of HR 3221, Housing Assistance Tax Act of 2008