Senate votes for tax breaks for home builders and credits for home buyers

Focusing on problems faced by the home building industry in the current housing crisis, the U.S. Senate voted overwhelmingly last Thursday to give home builders a $6 billion tax break by temporarily extending a rule that lets businesses count current losses against taxes from prior profitable years. The bill would also permit money-losing companies to accelerate use of accumulated tax credits for new business investments, the Washington Post reports.

The Senate bill also gives a $7,000 credit to buyers of foreclosed properties, raises the limit on mortgages backed by the Federal Housing Administration (FHA) to $550,000, provides $180 million for counseling to help homeowners avoid foreclosure, and contains provisions that give military service personnel special protections against foreclosure and more easily affordable mortgages.

Calling the vote "just the beginning of a process," Senate Majority Leader Harry Reid (D-NV) said that he "[hopes] that when the process is complete, we will have a strengthened bipartisan bill that will do even more to help families, communities and our economy."

The House of Representatives is currently considering plans to assist homeowners facing foreclosure. Some form of the combined House and Senate proposals will be included in a final housing bill that will be sent to the President for approval.

A House of Representatives proposal supported by Representative Barney Frank, (D-MA) and chairman of the House Financial Services Committee would allow homeowners who may now owe more on their homes than they are worth, to refinance from adjustable rate mortgages to 30-year fixed rate mortgages backed by as much as $300 billion in FHA insurance. Frank claims that the plan could help as many as 1.5 million homeowners at risk of foreclosure.

The administration announced their own plan at a meeting of the Financial Services Committee last week, which like the House proposal, focuses on distressed homeowners. The administration's plan would expand an existing FHA mortgage insurance program and provide aid to state and local governments. The plan is less expensive and would assist fewer homeowners.

The Senate bill, which calls for expenditures of $15 billion over ten years, is opposed by the White House, the Post reports.

You may like these other stories...

All that was needed on Tuesday was a voice vote for the House of Representatives to pass a bill that would prevent state and local governments from taxing access to the Internet.Now the ball is in the Senate’s court....
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.