Senate Passes Housing Tax Relief Bill

The Senate today passed, by a 72-13 vote, the housing stimulus bill (H.R. 3221, The American Housing Rescue & Foreclosure Prevention Act).  The House on Thursday had approved the measure by a 272-152 vote after President Bush earlier in the day dropped his veto threat and urged Republicans to support the bill.  There are four main tax cuts in the $15.1 billion tax package:

• Refundable tax credit for first time home buyers (10% of the purchase price, up to a $7,500 credit)
• Additional standard deduction for real property taxes for non-itemizers ($500 single/$1,000 joint)
• Expansion of Gulf Opportunity Zone incentives
• Temporary increase in the low-income housing tax credit

The major tax increases in the package are:

• Information returns for merchant payment card reimbursements
• Delay implementation of worldwide allocation of interest until 2011
• Modification of the § 121 exclusion of gain on sale of a principal residence

For further explanation of these tax provisions, see:

• Senate Press Release
• House Staff Summary
• Senate Staff Summary
• Joint Committee on Taxation Technical Explanation (JCX-63-08)
• CCH Tax Briefing

For press and blogosphere coverage, see:

• Associated Press
• CNN Money
• The Hill
• New York Times
• Politico
• Reuters
• Wall Street Journal