IRS Withdraws Rules Harmful to Secondary Mortgage Market
In a victory for home buyers and the nation’s housing industry, the Internal Revenue Service on April 22 withdrew harmful proposed tax regulations that would have impaired the operation of the secondary mortgage market.
In late 2006, NAHB urged the Department of the Treasury and the IRS to withdraw the proposed regulations.
Under the new rules, mortgages sold on the secondary market would have been treated as capital assets for tax purposes and losses on them could only have been deducted against capital gain income instead of ordinary business income.
This would have reduced the demand for mortgage debt on the secondary market, ultimately increasing the financing costs of buying a home. More fundamentally, the proposed regulations would have interfered with the mission of the housing government sponsored enterprises of providing liquidity to the mortgage market.
“The proposed regulations run counter to congressional intent and numerous tax court decisions and overturn decades of established practice concerning the tax treatment of assets sold in the ordinary course of a taxpayer’s trade of business,” NAHB wrote to the Treasury and IRS when the rules were proposed.
For more information, e-mail Robert Dietz at NAHB, or call him at 800-368-5242 x8285.
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Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.