Some of the tax provisions included in the plan are:
► One year of Alternative Minimum Tax (AMT) patch, setting 2008 exclusion of $46,200 for individuals and $69,950 for joint filers
► Extensions of expiring provisions including:
o Teacher's above the line $250 expense deduction
o Deduction of qualified tuition through the end of 2009
o Choice of sales tax deduction or state income tax deduction, whichever is higher, as an itemized deduction
o Property tax deduction for non-itemizers
o Allow taxpayers over age 70½ to contribute an IRA distribution of up to $100,000 to charity and exclude the amount from income
o Relief for taxpayers whose mortgage debt has been reduced through foreclosure or reduced through a restructuring. This kind of reduction in debt traditionally counted as income under the tax code, but was made exempt in 2007. The new measure extends this protection from the end of 2009 through 2012.
o 15-year cost recovery for qualified leasehold improvements and restaurant property, and new 15-year treatment for qualified retail improvement property
► Changes to preparer penalty rules
► Increase in the AMT refundable credit
► Liberalization of the refundable child credit, lowering the “floor” for the refundability of the credit from approximately $12,050 to $8,500
Of course, California conforms to none of these changes. Click here for a PDF version of the Act.
For more details, click on this CCH link.
