As I will be “going into hiding” for the next 7 days or so I wanted to provide some comments on Friday’s Emergency Economic Stabilization Act of 2008 before I begin “lock-down”.
In its analysis of the tax aspects of the bill CCH calls it “one of the largest tax bills in recent years” and points out that “The new law makes almost 300 changes to the Internal Revenue Code”.
The impact on 1040 (and 1040A) filers is not much more than what I reported in my post “SOME OF THE INDIVIDUAL TAX BENEFITS IN THE BAILOUT BILL”.
In addition-
* As had been in the bill from the beginning, the exclusion from federal taxable income of mortgage debt forgiveness of up to $2 Million ($1 Million for married filing separately) on a principal residence, originated in the Mortgage Forgiveness Debt Relief Act, is extended from 2009 through 2012.
* Brokers are required to report the adjusted basis of publicly traded securities, and identify the gain or loss as short-term or long-term, in addition to the gross proceeds, on Form 1099-B. Hurray! This provision benefits us tax preparers as well as the IRS, who can now match gains and losses reported on Schedule D. Unfortunately it will not take effect for a while. It begins with stock acquired in 2011, mutual fund shares acquired in 2012, and “other securities” acquired in 2013. Too bad it did not begin with all investments acquired in 2009.
* The residential energy property credit is extended beyond 2009. I will provide more details on this aspect of the Act after I have finished the GD extensions.
* Individuals and businesses who were/are affected by midwestern, Hurricane Ike and certain other national disasters are provided a multitude of “relief”. More on this later.
* Employers can now give employees who commute to work by bicycle up to $20.00 per month as a tax-free “transportation fringe benefit” beginning in 2009. The reason for this is somewhat confusing – I expect it was needed to win a specific vote.
The Act also contains tons of “stuff” related to corporations and businesses.
In its analysis of the tax aspects of the bill CCH calls it “one of the largest tax bills in recent years” and points out that “The new law makes almost 300 changes to the Internal Revenue Code”.
The impact on 1040 (and 1040A) filers is not much more than what I reported in my post “SOME OF THE INDIVIDUAL TAX BENEFITS IN THE BAILOUT BILL”.
In addition-
* As had been in the bill from the beginning, the exclusion from federal taxable income of mortgage debt forgiveness of up to $2 Million ($1 Million for married filing separately) on a principal residence, originated in the Mortgage Forgiveness Debt Relief Act, is extended from 2009 through 2012.
* Brokers are required to report the adjusted basis of publicly traded securities, and identify the gain or loss as short-term or long-term, in addition to the gross proceeds, on Form 1099-B. Hurray! This provision benefits us tax preparers as well as the IRS, who can now match gains and losses reported on Schedule D. Unfortunately it will not take effect for a while. It begins with stock acquired in 2011, mutual fund shares acquired in 2012, and “other securities” acquired in 2013. Too bad it did not begin with all investments acquired in 2009.
* The residential energy property credit is extended beyond 2009. I will provide more details on this aspect of the Act after I have finished the GD extensions.
* Individuals and businesses who were/are affected by midwestern, Hurricane Ike and certain other national disasters are provided a multitude of “relief”. More on this later.
* Employers can now give employees who commute to work by bicycle up to $20.00 per month as a tax-free “transportation fringe benefit” beginning in 2009. The reason for this is somewhat confusing – I expect it was needed to win a specific vote.
The Act also contains tons of “stuff” related to corporations and businesses.
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