H.R. 5720, The Housing Assistance Tax Act of 2008

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H.R. 5720 would amend the Internal Revenue Code of 1986 to provide assistance for housing.

Detailed Summary

Housing Assistance Tax Act of 2008 - Amends the Internal Revenue Code relating to the low-income housing tax credit, tax-exempt housing bonds, real estate investment trusts (REITs) and to provide assistance to first-time home buyers and home owners.

Increases in 2008 and 2009 the state allocation limits on low-income housing tax credits. Modifies certain rules relating to the low-income housing tax credit, tax-exempt housing bonds, and the rehabilitation of government-leased buildings.

Allows: (1) first-time home buyers a refundable tax credit for 10% of the purchase price of a principal residence, up to $7,500; and (2) individual taxpayers who claim the standard deduction an additional deduction from gross income for state and local real property taxes.

Authorizes: (1) an additional $10 billion in the volume cap for issuing tax-qualified bonds for certain residential rental projects; and (2) use of mortgage bond proceeds to refinance certain subprime residential mortgage loans.

Exempts from the alternative minimum tax (AMT) tax-exempt interest on certain housing bonds. Allows low-income housing and rehabilitation tax credit amounts to offset AMT liability.

Allows certain municipal bonds that are guaranteed by federal home loan banks to qualify as tax-exempt bonds.

Modifies rules relating to REITs to: (1) treat passive foreign exchange gains attributable to overseas real estate investment as qualifying REIT income; (2) increase from 20 to 25% the the maximum value of an REIT's total assets that may be represented by securities of one or more taxable REIT subsidiaries; (3) revise safe harbor rules for the excise tax penalty on certain REIT sales activities; and (4) treat rental payments made by a health care facility to an REIT as qualifying REIT income.

Requires brokers who sell publicly-traded securities to report the customer's adjusted basis in such securities.

Delays until after 2009 the taxpayer election to allocate interest expense between U.S. and foreign sources for purposes of the foreign tax credit limitation.

Status of the Legislation

Latest Major Action: 4/9/2008: House committee/subcommittee actions. Status: Ordered to be Reported (Amended) by the Yeas and Nays: 35 - 5.

Points in Favor

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Points Against

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