Tax News

CCH (cch.taxgroup.com) reports:

  House lawmakers on September 24 approved the Alternative Minimum Tax (AMT) Relief Bill of 2008 (HR 7005) and the Disaster Tax Relief Bill of 2008 (HR 7006).

AMT Bill

 
HR 7005, a $64.6-billion measure authored by House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., does not include a revenue offset and passed the House by a bipartisan vote of 393 to 30. Ways and Means member Richard E. Neal, D-Mass., called HR 7005 a true, hold-harmless AMT patch but noted that the measure does not meet House pay-as-you-go (PAYGO) budget rules.

  The bill would provide AMT relief for nonrefundable personal credits and would increase the AMT exemption amount to $69,950 for joint filers and $46,200 for individuals. The legislation would also provide relief for AMT payors who have exercised incentive stock options and would make changes to the refundable AMT credit, according to a summary provided by Rangel. Rep.

  Thomas M. Reynolds, R-N.Y., said that, absent a long-term proposal, Congress has no choice but to pass HR 7005. Congress's inaction in 2008 has left many taxpayers hanging in the balance, he said.

  The Bush administration, in a written statement, praised the House for considering the AMT relief measure without including tax increases and urged Congress to send legislation to the president's desk as soon as possible in order to reduce the risk of a disruption in the 2009 tax filing season. Meanwhile, Senate Finance Committee Chairman Max Baucus, D-Mont., said the Senate-passed bill, HR 6049, includes an extension of expiring tax provisions, AMT relief and energy tax incentives.

  House lawmakers have not yet received that bill from the Senate and have signaled their displeasure with HR 6049 since the extenders provisions are not totally offset by corresponding tax increases or spending cuts. House passage of the Rangel AMT bill sets up a scenario where the AMT bill is cleared for the White House, while the extenders bill is delayed until 2009.

Disaster Bill

  The House also voted to pass the Disaster Tax Relief Act of 2008 (HR 7006) on September 24. Also introduced by Rangel, the measure passed by a 419 to 4 vote. He said the bill would provide a flexible package of economic recovery incentives to help families and businesses recover from the recent floods and hurricanes in the Midwest. The legislation would provide tax relief to taxpayers affected by federally declared disasters nationwide, between January 1, 2008, and December 31, 2011. According to a summary provided by Rangel, the measure would waive the income limitations on personal loss deductions, allow businesses to write off certain qualified disaster cleanup expenses and permit a five-year carryback for certain losses.

  The bill would also waive certain mortgage revenue bond requirements to allow bond proceeds to be used for rebuilding, provide additional low-income housing tax credits to communities with housing losses, add a new set of disaster private activity bonds for business reconstruction and waive certain limitations on charitable contributions for disaster relief, according to the summary.

  By Stephen K. Cooper and Paula Cruickshank, CCH News Staff

Alternative Minimum Tax Relief Act of 2008, HR 7005

Disaster Tax Relief Act of 2008, HR 7006

Ways and Means Release: House Passes Bipartisan AMT Relief Bill

Ways and Means Release: House Passes Nationwide Disaster Relief Tax Package

SFC Release: Senate Passes Baucus-Grassley Clean Energy Incentives, Extensions of Expiring Tax Cuts, Disaster Tax Relief and Protection from AMT

SFC Release: Grassley Statement on Tax Extenders, Disaster Tax Relief

SFC Release: Baucus Statement on Senate Legislation for Jobs, Energy, Families

SAP on HR 7005-Alternative Minimum Tax Relief Act of 2008

JCT Technical Explanation of HR 7005, the Alternative Minimum Tax Relief Act of 2008,
JCX-71-08

JCT Estimated Revenue Effects of HR 7005, the Alternative Minimum Tax Relief Act of 2008,
JCX-72-08

JCT Technical Explanation of HR 7006, the Disaster Tax Relief Act of 2008, JCX-73-08

JCT Estimated Revenue Effects of HR 7006, the Disaster Tax Relief Act of 2008, JCX-74-08