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Senate Finance Committee stimulus tax bill includes AMT patch

January 28, 2009

The Senate Finance Committee version of the stimulus tax bill includes a "patch" to protect millions of taxpayers from the alternative minimum tax through 2009. The bill increases the AMT exemption "temporarily" (to $70,950 for joint filers and $46,200 for individuals), enabling Congress to pretend their fiscal situation is slightly less dire than it really is.

The Senate bill also has some other new provisions:

- It matches the House bill's conversion of the spiff for first-time homebuyers to an actual credit, rather than an interest-free 15-year loan.
- It lets businesses stretch the payment of tax on debt forgiveness income over 10 years.
- It reduces the 10-year built-in gain period for new S corporation elections built-in gains recognized* in 2009 or 2010 to 7 years for S elections taking effect in 2009 or 2010.

Because we all know that it's the built-in gain tax that's holding back the economy, after all.

Links:

Modifications to Chairman's mark, Senate bill. (doesn't include AMT patch)
Senate Bill Chairman's Mark
Joint Committee analysis
UPDATED Link: AMT details (via Eric Januzelli)

*A reader pointed out that the S corporation Association website said that it applied to built-in gains recognized in 2009 and 2010, not elections made in those years. A reading of the legislation itself, which is now available online, confirms that. Advance to page 60 of the legislative text for the provision.

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