Thursday, February 28, 2008

Franchise Tax Board offers Financial Literacy Web Site

http://www.ftb.ca.gov/individuals/financial_literacy.shtml

Direct Deposit of Economic Stimulus Rebate

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/24/BUBCV76DP.DTL
It appears that those taxpayers who choose to have direct deposit of their tax refund will get their economic stimulus rebate directly deposited into their bank account as well. See the article above from the San Francisco Chronicle.

Here is an FAQ from the IRS on the rebate.

The Internal Revenue Service said it would begin sending out more than 130 million economic stimulus payments in weekly installments starting May 2, with the distribution schedule based on the last two digits of the recipient's Social Security number.

The initial recipients will be those whose Social Security numbers end between 00 and 20, and who have elected to receive their tax refunds by direct deposit. For those who don't use direct deposit, paper checks will be sent starting May 16.

Taxpayers must file a tax return by April 15 if they want to be among those receiving the first round of payments. The latest date to file and receive a payment is October 15. The IRS plans to complete the initial round of payments by early July.

The IRS also added an online calculator to its Web site to help people determine the amount they will receive. After they answer a series of questions, the calculator displays the projected dollar value of the payment.

Here is the payment schedule provided by the IRS:

Stimulus Payment Schedule for Tax Returns
Received and Processed by April 15

























































































Direct Deposit Payments



If the last two digits of your Social Security number are:



Your economic stimulus payment deposit should be transmitted to your bank account by:



00 – 20



May 2



21 – 75



May 9



76 – 99




May 16



Paper Check



If the last two digits of your Social Security number are:



Your check should be in the mail by:



00 – 09



May 16



10 – 18



May 23



19 – 25




May 30



26 – 38



June 6



39 – 51



June 13



52 – 63



June 20




64 – 75



June 27



76 – 87




July 4



88 – 99



July 11


Tuesday, February 26, 2008

IRS Launches E-Postcards for Tax-Exempts

http://www.webcpa.com/article.cfm?ARTICLEID=26899
The Internal Revenue Service has introduced an electronic filing system that allows small tax-exempt organizations to file Form 990-N "e-Postcards" to report their annual income.

In the past, tax-exempt organizations that earned annual gross receipts of $25,000 or less did not need to file a Form 990 or 990-EZ. But the Pension Protection Act of 2006 now requires them to file Form 990-N for tax years beginning in 2007.

The e-Postcards must be filed electronically, according to the IRS. To file them, an organization must include its employer identification number, tax year, legal name and mailing address, any other names it uses, an Internet address if one exists, the name and address of a principal officer and a statement that confirms the organization's annual gross receipts are normally $25,000 or less.

The due date for filing Form 990-N is the 15th day of the fifth month after the close of the tax year. For example, an organization whose most recent tax year ended on Dec. 31, 2007, must file the e-Postcard by May 15, 2008. Under the new law, organizations that do not file a Form 990-N for three consecutive years will lose their tax-exempt status.

The IRS has launched a disclosure site where the public can search for and view a specific organization's e-Postcard. For more information, visit the charities and nonprofits section of IRS.gov.

Tuesday, February 19, 2008

Safe Harbor for 1031 Exchange

http://www.irs.gov/pub/irs-drop/rp-08-16.pdf:
The Internal Revenue Service has issued Revenue Procedure 2008-16, which provides a safe harbor under which the IRS will not challenge whether a property that is rented to others but also occasionally used by the owners for personal purposes qualifies as property that may be exchanged in a like-kind exchange under Section 1031 of the Tax Code.

A dwelling unit that a taxpayer intends to be relinquished property in a § 1031 exchange qualifies as property held for productive use in a trade or business or for investment if:
(a) The dwelling unit is owned by the taxpayer for at least 24 months immediately before the exchange (the “qualifying use period”); and
(b) Within the qualifying use period, in each of the two 12-month periods immediately preceding the exchange,
(i) The taxpayer rents the dwelling unit to another person or persons at a fair rental for 14 days or more, and
(ii) The period of the taxpayer’s personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the dwelling unit is rented at a fair rental.
For this purpose, the first 12-month period immediately preceding the exchange ends on the day before the exchange takes place (and begins 12 months prior to that day)and the second 12-month period ends on the day before the first 12-month period begins (and begins 12 months prior to that day).
(2) Replacement property. A dwelling unit that a taxpayer intends to be replacement property in a § 1031 exchange qualifies as property held for productive use in a trade or business or for investment if:
(a) The dwelling unit is owned by the taxpayer for at least 24 months immediately after the exchange (the “qualifying use period”); and
(b) Within the qualifying use period, in each of the two 12-month periods immediately after the exchange,
(i) The taxpayer rents the dwelling unit to another person or persons at a fair rental for 14 days or more, and
(ii) The period of the taxpayer’s personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the dwelling unit is rented at a fair rental. For this purpose, the first 12-month period immediately after the exchange begins on the day after the exchange takes place and the second 12-month period begins on the day after the first 12-month period ends.

Personal use. For purposes of this revenue procedure, personal use of a dwelling unit occurs on any day on which a taxpayer is deemed to have used the dwelling unit for personal purposes under § 280A(d)(2) (taking into account § 280A(d)(3) but not § 280A(d)(4)).

Fair rental. For purposes of this revenue procedure, whether a dwelling unit is rented at a fair rental is determined based on all of the facts and circumstances that exist when the rental agreement is entered into. All rights and obligations of the parties to the rental agreement are taken into account.

Special rule for replacement property. If a taxpayer files a federal income tax return and reports a transaction as an exchange under § 1031, based on the expectation that a dwelling unit will meet the qualifying use standards in section 4.02(2)of this revenue procedure for replacement property, and subsequently determines that the dwelling unit does not meet the qualifying use standards, the taxpayer, if necessary, should file an amended return and not report the transaction as an exchange under § 1031.

Limited application of safe harbor. The safe harbor provided in this revenue procedure applies only to the determination of whether a dwelling unit qualifies as property held for productive use in a trade or business or for investment under § 1031. A taxpayer utilizing the safe harbor in this revenue procedure also must satisfy all other requirements for a like-kind exchange under § 1031 and the regulations thereunder.

EFFECTIVE DATE
This revenue procedure is effective for exchanges of dwelling units occurring on or after March 10, 2008.

Thursday, February 14, 2008

Taxpayers must file 2007 tax returns to get rebate

The Internal Revenue Service said that even people who do not normally file tax returns because of their low incomes would need to file this year in order to receive an economic stimulus payment. They must file either a 1040 or a 1040A form (no 1040EZ) with the words "Stimulus Payment" written on the top of the form, see sample here.

Clickhttp://www.irs.gov/efile/lists/0,,id=179739,00.html for info for those who normally don't need to file tax returns.

President Bush has signed the economic stimulus package into law. According to the IRS, the return must show at least $3,000 in qualifying income. Low-income workers, Social Security recipients, disabled veterans and retired railroad workers who might not otherwise need to file a tax return must do so in order to receive the tax rebate.

Payments range from $300 to $600 for individuals and $600 to $1,200 for joint filers. Taxpayers may also receive $300 for each qualifying child. In most cases, low-income recipients will get $300 each, or $600 for joint filers.

"Some people receiving Social Security and veterans' benefits may not realize they will need to file a tax return to get the stimulus payment," said Acting IRS Commissioner Linda Stiff. "To reach these people, the IRS and Treasury will work closely with the Department of Veterans Affairs, the Social Security Administration and key beneficiary groups on outreach efforts."

Filers will also need to have a valid Social Security number, not an Individual Taxpayer Identification Number. The ITIN is often issued to those who are unable to get a Social Security number, such as undocumented workers. The recipient also cannot be claimed as a dependent on any other filer's tax return. Also ineligible are those who file a Form 1040-NR, 1040-PR or 1040-SS. The return must be filed on a 1040, 1040A or 1040EZ.

Payments will be processed through Dec. 31. The IRS has been budgeted $202 million to handle the rebate checks. The IRS expects to process an additional 10 to 20 million returns this year as a result of the rebate. Payments to higher-income taxpayers will be reduced by 5 percent of the amount of adjusted gross income above $75,000 for individuals and $150,000 for those filing jointly.

For information about the stimulus package, see http://www.irs.gov/irs/article/0,,id=177937,00.html.

The IRS has issued Revenue Procedure 2008-21 that says it won't challenge the accuracy of income tax returns filed in compliance with Notice 2008-28 by eligible individuals who enter $1.00 in adjusted gross income solely for purposes of effectuating the electronic filing of the return.

Tuesday, February 12, 2008

IRS Releases Tax Stats for Corporations

http://www.irs.gov/taxstats/bustaxstats/article/0,,id=149687,00.html
The Corporation Source Book presents balance sheet, income statement, tax, and other selected items by size of total assets for all returns with and without net income. Statistical tables are available by industrial sectors, major groups within a sector, and minor industries within a major group. Industry detail is based on the North American Industry Classification System (NAICS). The Source Book, which underlies the Statistics of Income--Corporation Income Tax Returns publication (i.e., the Complete Report), is part of an annual series.

Click here for the IRS Tax Stats home page.

Sunday, February 10, 2008

Seven Financial 'Rules-of-Thumb' That Make Little Sense

http://finance.yahoo.com/banking-budgeting/article/104387/Seven-Financial-Rules-Of-Thumb-That-Make-Little-Sense.
1. Subtract your age from 100
2. Keep three to six months of salary in an emergency fund
3. Set aside 10% of gross income for savings
4. To retire comfortably, your investments must generate 70% to 80% of the income you received while working
5. The stock market will give you a 10% annual return
6. Life insurance benefits should equal five times your current income
7. Refinance your home when interest rates drop by 2 percentage points

Read the article for more details. Here is another link to the article on MarketWatch:
http://www.marketwatch.com/news/story/seven-financial-rules-thumb-deep/story.aspx?guid=%7B51AEC6AA%2DCB7B%2D4803%2DA4D5%2D7036B767F215%7D.

Friday, February 8, 2008

Full text of final Stimulus Package, H.R. 5140

H.R.5140
Economic Stimulus Act of 2008 (Enrolled as Agreed to or Passed by Both House and Senate)

TITLE I--RECOVERY REBATES AND INCENTIVES FOR BUSINESS INVESTMENT

SEC. 101. 2008 RECOVERY REBATES FOR INDIVIDUALS.

(a) In General- Section 6428 of the Internal Revenue Code of 1986 is amended to read as follows:

`SEC. 6428. 2008 RECOVERY REBATES FOR INDIVIDUALS.

`(a) In General- In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2008 an amount equal to the lesser of--

`(1) net income tax liability, or

`(2) $600 ($1,200 in the case of a joint return).

`(b) Special Rules-

`(1) IN GENERAL- In the case of a taxpayer described in paragraph (2)--

`(A) the amount determined under subsection (a) shall not be less than $300 ($600 in the case of a joint return), and

`(B) the amount determined under subsection (a) (after the application of subparagraph (A)) shall be increased by the product of $300 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.

`(2) TAXPAYER DESCRIBED- A taxpayer is described in this paragraph if the taxpayer--

`(A) has qualifying income of at least $3,000, or

`(B) has--

`(i) net income tax liability which is greater than zero, and

`(ii) gross income which is greater than the sum of the basic standard deduction plus the exemption amount (twice the exemption amount in the case of a joint return).

`(c) Treatment of Credit- The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.

`(d) Limitation Based on Adjusted Gross Income- The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).

`(e) Definitions- For purposes of this section--

`(1) QUALIFYING INCOME- The term `qualifying income' means--

`(A) earned income,

`(B) social security benefits (within the meaning of section 86(d)), and

`(C) any compensation or pension received under chapter 11, chapter 13, or chapter 15 of title 38, United States Code.

`(2) NET INCOME TAX LIABILITY- The term `net income tax liability' means the excess of--

`(A) the sum of the taxpayer's regular tax liability (within the meaning of section 26(b)) and the tax imposed by section 55 for the taxable year, over

`(B) the credits allowed by part IV (other than section 24 and subpart C thereof) of subchapter A of chapter 1.

`(3) ELIGIBLE INDIVIDUAL- The term `eligible individual' means any individual other than--

`(A) any nonresident alien individual,

`(B) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and

`(C) an estate or trust.

`(4) EARNED INCOME- The term `earned income' has the meaning set forth in section 32(c)(2) except that--

`(A) subclause (II) of subparagraph (B)(vi) thereof shall be applied by substituting `January 1, 2009' for `January 1, 2008', and

`(B) such term shall not include net earnings from self-employment which are not taken into account in computing taxable income.

`(5) BASIC STANDARD DEDUCTION; EXEMPTION AMOUNT- The terms `basic standard deduction' and `exemption amount' shall have the same respective meanings as when used in section 6012(a).

`(f) Coordination With Advance Refunds of Credit-

`(1) IN GENERAL- The amount of credit which would (but for this paragraph) be allowable under this section shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer under subsection (g). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).

`(2) JOINT RETURNS- In the case of a refund or credit made or allowed under subsection (g) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.

`(g) Advance Refunds and Credits-

`(1) IN GENERAL- Each individual who was an eligible individual for such individual's first taxable year beginning in 2007 shall be treated as having made a payment against the tax imposed by chapter 1 for such first taxable year in an amount equal to the advance refund amount for such taxable year.

`(2) ADVANCE REFUND AMOUNT- For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such first taxable year if this section (other than subsection (f) and this subsection) had applied to such taxable year.

`(3) TIMING OF PAYMENTS- The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this section as rapidly as possible. No refund or credit shall be made or allowed under this subsection after December 31, 2008.

`(4) NO INTEREST- No interest shall be allowed on any overpayment attributable to this section.

`(h) Identification Number Requirement-

`(1) IN GENERAL- No credit shall be allowed under subsection (a) to an eligible individual who does not include on the return of tax for the taxable year--

`(A) such individual's valid identification number,

`(B) in the case of a joint return, the valid identification number of such individual's spouse, and

`(C) in the case of any qualifying child taken into account under subsection (b)(1)(B), the valid identification number of such qualifying child.

`(2) VALID IDENTIFICATION NUMBER- For purposes of paragraph (1), the term `valid identification number' means a social security number issued to an individual by the Social Security Administration. Such term shall not include a TIN issued by the Internal Revenue Service.'.

(b) Administrative Amendments-

(1) DEFINITION OF DEFICIENCY- Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by striking `and 53(e)' and inserting `53(e), and 6428'.

(2) MATHEMATICAL OR CLERICAL ERROR AUTHORITY- Section 6213(g)(2)(L) of such Code is amended by striking `or 32' and inserting `32, or 6428'.

(c) Treatment of Possessions-

(1) PAYMENTS TO POSSESSIONS-

(A) MIRROR CODE POSSESSION- The Secretary of the Treasury shall make a payment to each possession of the United States with a mirror code tax system in an amount equal to the loss to that possession by reason of the amendments made by this section. Such amount shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.

(B) OTHER POSSESSIONS- The Secretary of the Treasury shall make a payment to each possession of the United States which does not have a mirror code tax system in an amount estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payment to the residents of such possession.

(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES- No credit shall be allowed against United States income taxes under section 6428 of the Internal Revenue Code of 1986 (as amended by this section) to any person--

(A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or

(B) who is eligible for a payment under a plan described in paragraph (1)(B).

(3) DEFINITIONS AND SPECIAL RULES-

(A) POSSESSION OF THE UNITED STATES- For purposes of this subsection, the term `possession of the United States' includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.

(B) MIRROR CODE TAX SYSTEM- For purposes of this subsection, the term `mirror code tax system' means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

(C) TREATMENT OF PAYMENTS- For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 6428 of the Internal Revenue Code of 1986 (as amended by this section).

(d) Refunds Disregarded in the Administration of Federal Programs and Federally Assisted Programs- Any credit or refund allowed or made to any individual by reason of section 6428 of the Internal Revenue Code of 1986 (as amended by this section) or by reason of subsection (c) of this section shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months, for purposes of determining the eligibility of such individual or any other individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.

(e) Appropriations To Carry Out Rebates-

(1) IN GENERAL- Immediately upon the enactment of this Act, the following sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2008:

(A) DEPARTMENT OF THE TREASURY-

(i) For an additional amount for `Department of the Treasury--Financial Management Service--Salaries and Expenses', $64,175,000, to remain available until September 30, 2009.

(ii) For an additional amount for `Department of the Treasury--Internal Revenue Service--Taxpayer Services', $50,720,000, to remain available until September 30, 2009.

(iii) For an additional amount for `Department of the Treasury--Internal Revenue Service--Operations Support', $151,415,000, to remain available until September 30, 2009.

(B) SOCIAL SECURITY ADMINISTRATION- For an additional amount for `Social Security Administration--Limitation on Administrative Expenses', $31,000,000, to remain available until September 30, 2008.

(2) REPORTS- No later than 15 days after enactment of this Act, the Secretary of the Treasury shall submit a plan to the Committees on Appropriations of the House of Representatives and the Senate detailing the expected use of the funds provided by paragraph (1)(A). Beginning 90 days after enactment of this Act, the Secretary of the Treasury shall submit a quarterly report to the Committees on Appropriations of the House of Representatives and the Senate detailing the actual expenditure of funds provided by paragraph (1)(A) and the expected expenditure of such funds in the subsequent quarter.

(f) Conforming Amendments-

(1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting `or 6428' after `section 35'.

(2) Paragraph (1) of section 1(i) of the Internal Revenue Code of 1986 is amended by striking subparagraph (D).

(3) The item relating to section 6428 in the table of sections for subchapter B of chapter 65 of such Code is amended to read as follows:

`Sec. 6428. 2008 recovery rebates for individuals.'.

SEC. 102. TEMPORARY INCREASE IN LIMITATIONS ON EXPENSING OF CERTAIN DEPRECIABLE BUSINESS ASSETS.

(a) In General- Subsection (b) of section 179 of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph:

`(7) INCREASE IN LIMITATIONS FOR 2008- In the case of any taxable year beginning in 2008--

`(A) the dollar limitation under paragraph (1) shall be $250,000,

`(B) the dollar limitation under paragraph (2) shall be $800,000, and

`(C) the amounts described in subparagraphs (A) and (B) shall not be adjusted under paragraph (5).'.

(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after December 31, 2007.

SEC. 103. SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED DURING 2008.

(a) In General- Subsection (k) of section 168 of the Internal Revenue Code of 1986 (relating to special allowance for certain property acquired after September 10, 2001, and before January 1, 2005) is amended--

(1) by striking `September 10, 2001' each place it appears and inserting `December 31, 2007',

(2) by striking `September 11, 2001' each place it appears and inserting `January 1, 2008',

(3) by striking `January 1, 2005' each place it appears and inserting `January 1, 2009', and

(4) by striking `January 1, 2006' each place it appears and inserting `January 1, 2010'.

(b) 50 Percent Allowance- Subparagraph (A) of section 168(k)(1) of such Code is amended by striking `30 percent' and inserting `50 percent'.

(c) Conforming Amendments-

(1) Subclause (I) of section 168(k)(2)(B)(i) of such Code is amended by striking `and (iii)' and inserting `(iii), and (iv)'.

(2) Subclause (IV) of section 168(k)(2)(B)(i) of such Code is amended by striking `clauses (ii) and (iii)' and inserting `clause (iii)'.

(3) Clause (i) of section 168(k)(2)(C) of such Code is amended by striking `and (iii)' and inserting `, (iii), and (iv)'.

(4) Clause (i) of section 168(k)(2)(F) of such Code is amended by striking `$4,600' and inserting `$8,000'.

(5)(A) Subsection (k) of section 168 of such Code is amended by striking paragraph (4).

(B) Clause (iii) of section 168(k)(2)(D) of such Code is amended by striking the last sentence.

(6) Paragraph (4) of section 168(l) of such Code is amended by redesignating subparagraphs (A), (B), and (C) as subparagraphs (B), (C), and (D) and inserting before subparagraph (B) (as so redesignated) the following new subparagraph:

`(A) BONUS DEPRECIATION PROPERTY UNDER SUBSECTION (k)- Such term shall not include any property to which section 168(k) applies.'.

(7) Paragraph (5) of section 168(l) of such Code is amended--

(A) by striking `September 10, 2001' in subparagraph (A) and inserting `December 31, 2007', and

(B) by striking `January 1, 2005' in subparagraph (B) and inserting `January 1, 2009'.

(8) Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking `January 1, 2005' and inserting `January 1, 2010'.

(9) Paragraph (3) of section 1400N(d) of such Code is amended--

(A) by striking `September 10, 2001' in subparagraph (A) and inserting `December 31, 2007', and

(B) by striking `January 1, 2005' in subparagraph (B) and inserting `January 1, 2009'.

(10) Paragraph (6) of section 1400N(d) of such Code is amended by adding at the end the following new subparagraph:

`(E) EXCEPTION FOR BONUS DEPRECIATION PROPERTY UNDER SECTION 168(k)- The term `specified Gulf Opportunity Zone extension property' shall not include any property to which section 168(k) applies.'.

(11) The heading for subsection (k) of section 168 of such Code is amended--

(A) by striking `September 10, 2001' and inserting `December 31, 2007', and

(B) by striking `January 1, 2005' and inserting `January 1, 2009'.

(12) The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking `PRE-JANUARY 1, 2005' and inserting `PRE-JANUARY 1, 2009'.

(d) Effective Date- The amendments made by this section shall apply to property placed in service after December 31, 2007, in taxable years ending after such date.

TITLE II--HOUSING GSE AND FHA LOAN LIMITS

SEC. 201. TEMPORARY CONFORMING LOAN LIMIT INCREASE FOR FANNIE MAE AND FREDDIE MAC.

(a) Increase of High Cost Areas Limits for Housing GSEs- For mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008:

(1) FANNIE MAE- With respect to the Federal National Mortgage Association, notwithstanding section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)), the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Association shall be the higher of--

(A) the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size; or

(B) 125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size.

(2) FREDDIE MAC- With respect to the Federal Home Loan Mortgage Corporation, notwithstanding section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Corporation shall be the higher of--

(A) the limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size; or

(B) 125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size.

(b) Determination of Limits- The areas and area median prices used for purposes of the determinations under subsection (a) shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 202 of this title.

(c) Rule of Construction- A mortgage originated during the period referred to in subsection (a) that is eligible for purchase by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation pursuant to this section shall be eligible for such purchase for the duration of the term of the mortgage, notwithstanding that such purchase occurs after the expiration of such period.

(d) Effect on Housing Goals- Notwithstanding any other provision of law, mortgages purchased in accordance with the increased maximum original principal obligation limitations determined pursuant to this section shall not be considered in determining performance with respect to any of the housing goals established under section 1332, 1333, or 1334 of the Housing and Community Development Act of 1992 (12 U.S.C.

For additional information, see TECHNICAL EXPLANATION OF THE REVENUE PROVISIONS
OF H.R. 5140
from the Joint Committee on Taxation.

Tuesday, February 5, 2008

Bush Budget Pushes Tax Proposals

http://www.webcpa.com/article.cfm?ARTICLEID=26693
Washington, D.C. (Feb. 5, 2008)
By WebCPA staff

The Bush administration's budget proposals include a number of tax provisions, so the Treasury Department has released an explanation of the fiscal year 2009 revenue proposals, also known as the Bluebook.

The administration's 2009 budget, as expected, called for extending the Bush tax cuts of 2001 and 2003. It also promotes improving compliance with the U.S. tax system. Other initiatives would provide a new standard deduction for health insurance of $15,000 for family coverage and $7,500 for single coverage.

In addition, the budget proposal extends provisions that provide AMT relief for one year. The proposal would increase the AMT exemption levels for 2008 to $46,250 for single and head-of-household filers, $70,050 for married taxpayers filing joint returns and $35,025 for married taxpayers filing separate returns. The proposal would also allow an individual to reduce their 2008 tax liability by the full amount of nonrefundable personal credits.

The Treasury Department has issued 16 proposals to help improve tax compliance, with an emphasis on improving information reporting. That includes requiring information reporting on payments to corporations, basis reporting on security sales, information reporting on merchant payment card reimbursements, and a Taxpayer Identification Number from contractors. It would also increase the information return penalties. The Treasury Department has requested $489 million for the IRS to increase its compliance efforts.

Saturday, February 2, 2008

Free Credit Report

https://www.annualcreditreport.com
You need to be careful which web site to go to when getting your free credit report. The link above is the only one that is truly free. The other ones almost always sign you up for credit monitoring with a monthly fee. Most do offer a free 30 day trial but you must cancel within the free trial period to avoid charges.

You can also call call 877-322-8228 or fill out the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Click here for an article from Consumer Reports Web Watch on this subject. Also visit the Federal Trade Commission web site http://www.ftc.gov/privacy/privacyinitiatives/credit_con.html for more information on credit reporting.