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Posted by Dick Adams on August 12, 2008, 8:51 pm
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The following is a cut-n-paste from a CCH article:
"According to a Democratic summary of the legislation,
the bill would provide tax relief to homebuyers and
homeowners, increase state allocations of low-income
housing tax credits and tax-exempt bond financing.
It would also increase funding for the Community
Development Block Grant program. The cost of these
and other provisions would be offset by requiring
credit card information return reporting by merchants,
delaying the worldwide allocation of interest rules
and modifying the exclusion of gains on the sale of a
principal residence."
What is the purpose of the credit card information return
reporting by merchants and what is its effect on taxpayers?
What are the worldwide allocation of interest rules?
How has the exclusion of gains on the sale of a principal
residence been modified?
Dick
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Posted by Alan on August 12, 2008, 9:02 pm
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Dick Adams wrote:
> The following is a cut-n-paste from a CCH article:
> "According to a Democratic summary of the legislation,
> the bill would provide tax relief to homebuyers and
> homeowners, increase state allocations of low-income
> housing tax credits and tax-exempt bond financing.
> It would also increase funding for the Community
> Development Block Grant program. The cost of these
> and other provisions would be offset by requiring
> credit card information return reporting by merchants,
> delaying the worldwide allocation of interest rules
> and modifying the exclusion of gains on the sale of a
> principal residence."
>
> What is the purpose of the credit card information return
> reporting by merchants and what is its effect on taxpayers?
>
> What are the worldwide allocation of interest rules?
>
> How has the exclusion of gains on the sale of a principal
> residence been modified?
>
> Dick
>
The actual bill that passed is the Housing and Economic Recovery
Act of 2008, HR 3221.
Actual Text: http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.3221.ENR:
JCT Explanation of the tax provisions:
http://www.house.gov/jct/x-63-08.pdf
CCH Briefing should answer your questions:
http://www.house.gov/jct/x-63-08.pdf
--
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
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<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by Paul Thomas, CPA on August 13, 2008, 8:44 am
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> The following is a cut-n-paste from a CCH article:
> "According to a Democratic summary of the legislation,
> the bill would provide tax relief to homebuyers and
> homeowners, increase state allocations of low-income
> housing tax credits and tax-exempt bond financing.
> It would also increase funding for the Community
> Development Block Grant program. The cost of these
> and other provisions would be offset by requiring
> credit card information return reporting by merchants,
> delaying the worldwide allocation of interest rules
> and modifying the exclusion of gains on the sale of a
> principal residence."
>
> What is the purpose of the credit card information return
> reporting by merchants and what is its effect on taxpayers?
There are, or so it is believed, a slew of people "in business" who are
operating mainly on e-bay type sites that conduct business through paypal
type services. Also, many believe that the reporting mechanisim from the
credit card processor (which will catch paypal users) - similar to a 1099 -
will increase reporting.
They act as if there are people who would, like, cheat on their taxes by
under-reporting their income. Say it isn't so.
For a bulk of taxpayers, it has no direct impact.
For those who conduct an unreported business - or an under-reported
business - they are soon going to force the reporting of some of your
revenues.
--
Paul A. Thomas, CPA
Watkinsville, Georgia
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Arthur Kamlet on August 16, 2008, 11:19 pm
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>The following is a cut-n-paste from a CCH article:
> "According to a Democratic summary of the legislation,
> the bill would provide tax relief to homebuyers and
> homeowners, increase state allocations of low-income
> housing tax credits and tax-exempt bond financing.
> It would also increase funding for the Community
> Development Block Grant program. The cost of these
> and other provisions would be offset by requiring
> credit card information return reporting by merchants,
> delaying the worldwide allocation of interest rules
> and modifying the exclusion of gains on the sale of a
> principal residence."
>
>What is the purpose of the credit card information return
>reporting by merchants and what is its effect on taxpayers?
>
>What are the worldwide allocation of interest rules?
>
>How has the exclusion of gains on the sale of a principal
>residence been modified?
The first two have been answered here.
The exclusion of gains modification is not going to bring in
much revenue, but satisfies some lawmakers sense of right
and wrong.
As Section 121 read before this change, if you owned and livd
in this home as yourmain home for at least two of the five years
before sale, you got the $250,000/500,000(MFJ) exclusion of gain.
Someone discovered you could have rental property for umpteen
years, then the last two years before sale move in and use it
as your main home, and still exclude the 250,000/500,000 except for
any post May 5, 1997 depreciation allowed/allowable on the rental.
The modification is to require you to prorate the exclusion for
the time used as a rental when you later move into the home as
your main home.
So if you used it as a rental for the first three of the five years,
and as your main home the last two of the five years, the exclusion
amount is now 2/5 x 250,000 = 100,000.
This prorating of the exclusion is one way only. If you lived in it
as your main home the first two or three years then converted it
to a rental the last three or two years, there is no need to
prorate the exclusion.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Phil Marti on August 17, 2008, 12:52 am
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"Arthur Kamlet" wrote:
> The modification is to require you to prorate the exclusion for
> the time used as a rental when you later move into the home as
> your main home.
I think it's the gain that's prorated, not the exclusion. IOW, the full
$250,000 exclusion is available if you have that much gain during the period
of qualified use.
It's Section 3092 of the bill, HR 3221
--
Phil Marti
Clarksburg, MD
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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