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Housing and Economic Recovery Act of 2008

President Bush sign HR 3221 today. I'll share a couple of quick excerpts that may be of interest to ministers who are considering a home purchase or already own a home.

First-time homebuyer credit. A credit against federal income tax equal to 10 percent of the purchase price (maximum credit of $8,000) for first-time homebuyers applies if the taxpayer "had no present ownership interest in a principle residence during the 3-year period" preceding the purchase. The purchase must be on or after April 9, 2008, and before April 1, 2009. Maybe now's the time for more churches to get out of the real estate business and sell their parsonages--something I've often advocated!

Married couples with more than $150,000 of income will lose the credit ratably as their income approaches $170,000, when it's eliminated entirely. On the other end of the income continuum, taxpayers with no tax will not receive a larger refund due to the credit. Apparently, it can only be used against income tax. And there's a recapture of the credit received if the home is resold within 15 years.

Real estate tax deduction for non-itemizers. Unless a pastor and his wife have more than $10,900 of itemized deductions in 2008, they cannot gain a benefit from their contributions, taxes, mortgage interest, and other personal write-offs. Beginning in 2008, they can take up to a $1,000 real estate tax deduction even if they cannot itemize.

More later, I'm sure...


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