[StBernard] Road Home recipients likely to get tax relief, key House leader says
Westley at da-parish.com
Wed Apr 30 22:31:27 EDT 2008
It's fairly complicated and I'd be happy to discuss this with the
constituent in more detail if they still have questions, but I hope the
following information is helpful.
Senator Landrieu initially introduced legislation that would allow
affected individuals to take the casualty loss and not have to pay taxes
on the Road Home grant. The price tag for that legislation was around
$3 billion and the IRS and many congressmen and women from around the
country felt that it was duplicating benefits by allowing folks to take
a casualty loss (which results in federal money being disbursed) and
then get more federal money for the same thing a year or two later. In
short, this piece of legislation was not going to move anywhere.
As a compromise, Senator Landrieu and the rest of the delegation
proposed the existing legislation that gives affected individuals the
option of amending their 2005 returns. By paying back whatever federal
funds were distributed as a result of the 2005 casualty loss deduction
(with 1 year of interest), the Road Home grant would not be taxed and
would not result in people moving into higher tax brackets. Because of
this, as the constituent notes, it may provide some much needed relief
to low and middle income families, while providing relatively little
assistance to individuals already in the high tax bracket. This piece
of legislation, including the 1 year of interest that had to be
included, still has a price tag of about $800 million dollars.
Obviously, Senator Landrieu would have preferred to see the initial
piece of legislation moving, but, unfortunately, this is the package
that was able to garner enough support to get through the Senate.
I do apologize that we could not provide assistance to all affected
residents, and I am fully aware of the sad reality that very few, if
any, homeowners have been made whole throughout this process. I hope
this at least provides some clarification as to why we are where we are
today, and what Senator Landrieu has been doing on your behalf in DC.
U.S. Senator Mary L. Landrieu
I just don't get it. How is Landrieu helping us? So we don't get
into a higher tax bracket but we have to pay back the income tax refund
2005 along with one year of interest. In some cases, this amount could
larger than calculating it the original way.
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