House Plan Makes Homebuyer Tax Credit More Enticing

House tax writers are proposing to make a first-time homebuyer tax credit more attractive to buyers and provide tax refunds for builders and certain financial institutions that have incurred large losses in 2008, but were profitable in past years. The package also includes a five-year carry-back provision that allows companies to charge off their 2008 losses against their profits going back to 2003. But Fannie Mae, Freddie Mac and companies receiving assistance from the Troubled Asset Relief Program are not eligible for this extended carry-back provision under the tax provisions drafted by House Ways and Means Committee chairman Charles Rangel, D-N.Y. "This package was developed with strong coordination between the House and Senate leaders, president-elect Obama and his economic team," Rep. Rangel said. The tax package removes a repayment requirement on the $7,500 first-time homebuyer tax credit. But it does not increase the tax credit or expand it to all homebuyers as requested by the homebuilders and Realtors. These tax provisions and others will be included in the economic stimulus bill.