About Taxes: Details of the Housing Assistance Tax Act
 | from William Perez
Congress has passed the housing bill aimed at reforming the housing markets, lending, and, yes, taxes relating to real estate. The tax portion of the law deals largely with REITS, housing bonds, and other issues relating to the investment community. There are, however, four provisions that will impact individuals and small businesses for years to come.
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In the Spotlight |
Housing Assistance Tax Act of 2008
The new tax law provides a refundable tax credit for first-time homebuyers, an additional standard deduction for homeowners who don't itemize, and rewrites the rules for calculating tax when you sell a house. Ebay hobbyists and small businesses should note the major revenue raiser in the law: reporting of credit card sales to the IRS beginning in 2011.
| | First Time Homebuyer Tax Credit
How would you like a 15-year, zero-percent-interest loan from Uncle Sam to buy a house? The tax act provides a tax credit of up to $7,500 if you buy a house before July 2009. But You have to pay back the credit over 15 years. This tax credit has a very limited lifespan, and applies to taxpayers earning less than $95,000 ($170,000 for joint filers).
| Prorated Capital Gains Exclusion for Some Homes
The new tax laws re-write the rules for determining how much capital gains can be excluded from tax when someone sells their house. In order to get the most tax benefit, a person will need to live in the house for the entire time they owned it. If the house is used as a second home, a vacation home, or a rental property, gains will need to be allocated between the excludable and non-excludable amounts.
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