Daily Tax Update - June 19, 2008

SENATE BEGINS DEBATE ON HOUSING STIMULUS BILL:  The Senate has begun debating the American Housing Rescue and Foreclosure Prevention Act of 2008 (H.R. 3221). The bill would create an additional standard deduction for property taxes paid by homeowners who do not itemize their federal taxes; provide first-time home buyers with an $8,000 refundable, repayable tax credit; and increase funding for mortgage revenue bonds. The Senate hopes to complete action on the bill by the July Fourth recess.

  • Today, Grassley said, “We need to address the housing downturn, but we need to show restraint and limit the relief so that it eases the problem and doesn’t simply create new ones. We need to be considerate of the many Americans that worked hard to save and buy homes and that will ultimately pay the price for this relief. Once again, the Senate is stepping up to the plate. This tax relief package helps encourage home ownership and provides targeted relief to homeowners who are looking to work out of a rough patch.” Grassley continued, “The centerpiece of this bill is a temporary $8,000 tax credit to help first-time home buyers buy homes, including homes that are in foreclosure. There is a glut of homes on the market. This glut is depressing home values. It is important that this excess inventory is moved so as to help retain home values...The bill also increases the cap for mortgage revenue bonds to give people with distressed loans additional options for re-financing. This is not a bail-out for home owners. This is a provision that helps enable people to keep their homes and pay their mortgages.”
  • The bill's offsets include: a new information reporting requirement on the use of credit or debit cards and other third-party network transactions; eliminating a provision that allows taxpayers to exclude gains on the sale of a principal residence allocated to a period of nonqualified use; and increasing penalties for failure to file tax returns.

H.R.6289: To amend the Internal Revenue Code of 1986 to increase the maximum reduction in estate tax value for farmland and other special use property, to restore and increase the estate tax deduction for family-owned business interests, and for other purposes.
Sponsor: Rep Conaway, K. Michael [TX-11] (introduced 6/18/2008)      Cosponsors (None)

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