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House passes homebuyer credit, NOL bill

November 06, 2009

The bill to extend and expand the fraud-ridden $8,000 First-time Homebuyer tax credit passed the House of Representatives yesterday on a 403-12 vote. It now goes to the President, who is expected to sign quickly (Update: The President signed the bill today) .

H.R. 3548 expands the credit to single taxpayers with AGI up to $125,000 and joint filers with AGIs up to $225,000; it phases out over a $20,000 AGI range beyond those limits. It also enables non-virgin homebuyers to qualify for a $6,500 credit if they've been in a house for five consecutive years out of the last eight.

The $8,000 credit was slated to expire at the end of this month; it now runs through next April 30.

NOL Extension

The bill also allows all taxpayers to carry back net operating losses for 2008 or 2009 back five years -- with a weird provision that only lets you offset half your income for the fifth carryback year. This will be welcome news to many taxpayers. A similar provision passed last year only applied to 2008 losses, and only for businesses with gross receipts up to $15 million. Many money-losing businesses have higher gross receipts, and many businesses are having a worse 2009 than 2008.

The IRS will have to release rules for claiming the new expanded carryback; we hope they are issued soon, as we know a lot of money-losing businesses could use the refunds about now.

SENATE VOTES 98-0 TO EXTEND HOMEBUYER CREDIT

IMPROVED LOSS CARRYBACKS FOR 2008, 2009 PASS SENATE

California Dreaming in Congress

Other coverage:

Farm CPA Today
TaxGrrrl
Kay Bell
TaxVox

Tags: Farm CPA Today.Homebuyer credit.Kay Bell.NOL.TaxGrrrl.TaxVox.