Congress recently passed three laws that contain some tax provisions. Here’s a quick overview:
FARM ACT– The Food, Conservation and Energy Act of 2008 was vetoed by President Bush but became law when Congress overrode his veto. As the short title implies, the law mainly affects farmers and includes provisions on conservation donations, race horse depreciation, timber sales, CCC loan transactions, and farm loss deductions. Relief for certain disaster victims and increases in estimated tax payments for large corporations in 2012 are among other miscellaneous provisions.
HEROES ACT– The Heroes Earnings Assistance and Relief Tax Act of 2008 provides tax breaks for military personnel, civilian employers of those called to military service, veterans, and reservists serving in the military. The Act’s revenue-raising provisions include an increase in the minimum penalty for failing to file a tax return, a requirement that certain foreign subsidiaries of U.S. corporations must now pay employment taxes, and an immediate tax bill on Americans who give up their U.S. citizenship to escape income and estate taxes.
HOUSING ACT– The Housing and Economic Recovery Act of 2008 was passed to provide financial stability to the troubled housing market and tax relief to homeowners and home buyers. The law gives first-time home buyers a refundable tax credit of up to $7,500 that must be paid back over 15 years. The credit phases out for singles with incomes over $75,000 ($150,000 for couples) and is available for home purchases from April 9, 2008, through June 30, 2009. Another provision gives homeowners an additional standard deduction for real property taxes in 2008. The maximum deduction is $500 for singles and $1000 for joint filers. One of the revenue-raising provisions in the law will limit the exclusion of gain on the sale of a principal residence that had been used previously as a rental property or second home.
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