House Passes Mortgage Debt Relief; Energy Legislation

On December 18, 2007 the House passed by unanimous consent the Senate version of the Mortgage Forgiveness Debt Relief Act of 2007. The legislation includes a three-year mortgage debt forgiveness exclusion of up to $2 million in debt on a principal residence, retroactive to January 1, 2007. The legislation also extends the mortgage insurance premium deduction for three years, includes an exclusion for benefits to volunteer fire-fighters and emergency medical responders, extends the joint return sale of principal residence exclusion to certain post-marriage sales by surviving spouses, clarifies student housing eligible for the low-income housing credit, and provides alternative tests for qualifying as a cooperative housing corporation. To pay for these provisions, the legislation increases and expands the penalties on failure to file partnership and S Corporation returns and modifies the amounts due on particular dates with respect to corporate estimated taxes. The President is expected to sign the legislation.

On December 18, 2007, the House passed and sent to the President, by a vote of 314 to 100, the Clean Renewable Energy and Conservation Act of 2007, as passed by the Senate without the tax title. Included in the legislation are two Tax Code provisions relating to the extension of the additional 0.2 percent FUTA surtax and seven-year amortization of geological and geophysical expenditures for certain major integrated oil companies. The President is expected to sign the legislation.