House Passes Revised AMT Relief Bill

On December 12, 2007, by a vote of 226 to 193, the House approved a more limited AMT relief bill (HR 4351) than its earlier effort (HR 3996), but it is still paid for, unlike the AMT relief legislation that passed the Senate on December 6. The revised House legislation includes a one-year increase in the AMT exemption amount and a one-year extension of the provision allowing nonrefundable credits for AMT purposes. The legislation also includes AMT relief with respect to incentive stock options and an increase in eligibility for the refundable child tax credit. The legislation is paid for by provisions taxing hedge fund managers currently on deferred compensation from offshore entities and a delay in the implementation of a rule that allows a liberalized method of allocating interest expense between U.S. and foreign sources in calculating the foreign tax credit limitation. The White House continued with its veto threat against any AMT legislation that includes tax increases.