2009
Fourth Quarter Tax Updates
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The Worker, Homeownership, and Business Assistance Act of 2009
(H.R. 3548), signed into law by President Obama on November 6, 2009,
has extended some important federal tax credits. As always, please give our office a
call or send us an email if you have any questions about these
developments.
First-time homebuyer credit. The first-time homebuyer credit, which reaches the
lesser of $8,000 or 10 percent of the purchase price of a qualified
residence, was originally scheduled to expire this year. This credit has now been extended
through at least April 30, 2010. Also, the starting point
of modified adjusted gross income threshold for the phase-out of the
credit has increased. The start
of phase-out for single individuals increased from $75,000 to $125,000
and for married couples filing joint returns the start of the phase-out
increased from $150,000 to $225,000.
Non-first-time homebuyer credit. Effective for purchases
after November 6, 2009, a reduced credit up to $6,500 is available for
individuals who have owned and used the same residence as a principal
residence for any five-consecutive year period during the previous
eight-year period ending with the date on which the new residence is
purchased. The same increased income phase-out that applies to the first-time
homebuyer credit also applies to the non-first-time homebuyer credit.
NOL carryback. The American Recovery and Reinvestment Act
of 2009 allowed eligible small businesses (with average gross receipts
of $15 million or less) to elect to carry back net operating losses
(NOLs) from 2008 for three, four or five years rather than the standard
two years. The new law provides
a similar election to all U.S. businesses of every size to carry back
NOLs up to five years but with a 50-percent income limit on NOL offsets
in the fifth year. The new,
expanded election is available for NOLs incurred in either 2008 or
2009, but not for both years.
However, an eligible small business that elected under the 2009
Recovery Act to carryback 2008 NOLs may make the election for an
additional year, enabling the qualified small business to carry back
NOLs from both 2008 and 2009 for up to five years.
If you have any
questions about these or other tax developments, please call us at
(315) 234-1100.
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