Housing & Recovery Act of 2008
Enacted July 30, 2008
- New and refundable tax credit for first-time home buyers equal to the lesser of $7,500 or 10% of the price of a first home purchased between April 8, 2008 and July 1, 2009. Subject to phase-outs. To be repaid over 15 years. Tax-free loan.
- Additional standard deduction for state and local real property taxes paid in 2008. Lesser of the taxes paid or $500 for single and $1,000 for married filing joint.
- Limitations on the exclusion of gain from the sale of a principle residence for periods of “non-qualified” use. Effective 2009.
- Low income housing credit and rehabilitation tax credit are able to offset AMT.
- Increased access to the low income housing credit.
- Interest on bonds issued after July 30, 2008 will no longer be a tax preference item for AMT.
- Election to accelerate AMT and research credits instead of taking bonus deprecation. Refundable for credits generated through 2005, subject to limitations.
- Identity protection of buyers and sellers of real estate transactions to avoid identity theft: Personal information will be provided to an independent third party.
- Enhanced access to the rehabilitation tax credit if greater than 35% but less than 50% of the property is leased to a government agency.
- Delay of the effective date for the “worldwide interest allocation” election for two years (until tax years beginning after December 31, 2010).
- Certain information reporting on credit card transactions beginning in 2011 for businesses.
Note: This is not a complete list of all the provisions in the Act. Please give us a call to discuss an item in greater depth or to inquire about an item not on this list.
Disclaimer: This document represents a general overview of recent tax developments and should not be relied upon without an independent, professional analysis of how any of these provisions may apply to your specific situation. Any tax information contained in the body of this narrative was not intended or written to be used, and cannot be used, by the recipient for the purposes of avoiding penalties that may be imposed under the Internal Revenue Code or provisions of applicable state or local law.