Key Tax Changes in theEmergency Economic Stabilization Act of 2008
On Oct. 3, President Bush signed into law the Emergency Economic Stabilization Act of 2008 (the “Act”). Most of us have referred to this legislation as the “Bailout” package. The final bill
contains items that impact small business and individuals other than assistance to large financial institutions. We just received a synopsis of the key elements and the following may be of interest to AOBA (Alpaca Owners and Breeders Association) members.
- Emergency economic stabilization related tax measures consist of a three-year extension for home mortgage debt forgiveness relief.
- Bank customers will receive $250,000 in Federal Deposit Insurance Corp. protection per depositor through Dec. 31, 2009, a temporary increase from the current $100,000.
- The 2008 Act boosts Alternative Minimum Tax (AMT) exemption amounts for individuals for 2008, and also provides that for 2008, personal nonrefundable credits may offset AMT and regular tax. Additionally, the 2008 Act also liberalizes the AMT refundable
credit amount rules.
More than 30 tax breaks that either expired at the end
of 2007 or are soon to expire have been extended by the 2008 Act. For example,
all of the following individual tax breaks are retroactively revived to apply
for the 2008 tax year and are extended to apply to the 2009 tax year as well:
- the election to deduct state and local general sales tax
- the above line deduction for higher education expenses
- the above line deduction for educator expenses
- the ability of taxpayers age 70 1/2; or older to make nontaxable IRA transfers to eligible charities
- the research credit (which is
- the 15-year write-off for qualified leasehold improvements and
qualified restaurant property (which is also liberalized)
- enhanced deductions for certain charitable contributions (which is also liberalized for
- and the expensing option for qualified environmental remediation
New tax relief measures include:
- relaxed write-off rules for film and TV productions
- quick 5-year depreciation for many types of farm
- modified rules for the penalty on understatement of a taxpayer's
liability by a tax return preparer
- mental health parity rules
- liberalized rules for the refundable child tax credit
AOBA (and Alpaca Farmgirl!) do not offer tax advice and this information is just a brief overview of portions of the Emergency Economic Stabilization Act. You should consult your tax advisor for specific details on how the new act might affect you and your farm or ranch. If you would like a referral to an accountant who is familiar with alpaca related tax issues, email me at firstname.lastname@example.org.