Daily Tax Update - April 3, 2008

$10.8 BILLION PACKAGE OF TAX INCENTIVES PROPOSED FOR HOUSING STIMULUS BILL:  Senate Finance Committee Chairman Max Baucus (D-MT) and ranking minority member Chuck Grassley (R-IA) proposed four tax incentives as part of the Senate housing stimulus bill.  Grassley said, “It's appropriate to use the tax code to help people buy homes and to help the many businesses that are tied to the housing industry recover from losses. Those businesses create jobs." The Senate began considering the housing stimulus bill today, but it is unclear when a final vote may be held. 

The tax incentives include:

  • raising the cap on tax-exempt mortgage revenue bonds by $10 billion and allow those bonds to be used for refinancing mortgages;
  • extending the net operating loss carryback from two to four years for losses incurred in 2008 and 2009;
  • providing a nonrefundable tax credit of $7,000 over two years to home buyers who purchase as their primary residence a qualified home in or near foreclosure within one year of the law's enactment; and
  • permitting nonitemizing taxpayers to claim a standard $500 deduction ($1,000 for joint filers) for local property taxes.

TAX BILL INTRODUCED APRIL 2nd:
H.R.5681: To amend the Internal Revenue Code of 1986 to provide incentives to improve America's research competitiveness, and for other purposes.
Sponsor: Rep McNerney, Jerry [CA-11] (introduced 4/2/2008)      Cosponsors (None)

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
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