2008 Housing Bill Brings Many Tax Changes

As everyone is aware, our country has been experiencing great financial turmoil for quite some time. With the increased gas prices and the economical deficit of this country, we have entered what I consider to be (but has been consecrated for fear of shear mental panic) a recession. With the turmoil in the mortgage markets, new changes for tax professionals is on the rise for 2009.

The September federal takeover of Fannie Mai and Freddie Mac has, unfortunately , overshadowed much of the substantial legislation that was enacted a little earlier this year. However, theses changes are monumental and will affect many of our tax clients in the upcoming year.

The Housing and Economic Recovery Act of 2008 was signed into law by our President Bush on July 30, with much media attention surrouding the forclosure provisions. But the act included changes to the mortgage programs, a new tax credit for the first time homeowner's, the ability for our non-itemizers to claim a state and local property tax deduction. Several revenue raising provisions were also included reduced exclusions for gains realized on home sales, the end of seller-funded down payment assistance programs, and increase in FHA loan down payments.