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Bailout Passes with IRA Rollover
and Tax Extenders
On October 3, 2008 the House passed the Emergency Economic
Stabilization Act of 2008 (H.R. 1424). The Senate had passed the
bill 74-25 earlier in the week.
Congressional leaders, business leaders, the White House and
millions of Americans who plan to borrow funds for any purpose
in the next years were all pleased with the bill. Federal
Reserve Chairman Ben Bernanke stated, "The legislation is a
critical step towards stabilizing our financial markets and
ensuring an uninterrupted flow of credit to households and
businesses."
The comprehensive legislation includes several divisions that
cover four principal areas. These are as follows:
- Economic Bailout of Bad Debt. There is initial
authority for Treasury to spend $100 billion to purchase at
discount the subprime debt securities of banks and major
financial institutions. The authority may be increased up to
a total of $700 billion. This section also includes a limit
of $500,000 on deductible executive salary and increases the
FDIC insurance on bank deposits from $100,000 to $250,000
per account.
- Tax Extenders. The tax extenders section includes
popular provisions that extend the sales tax deduction, the
teacher's expense deduction, the research and development
credit, favorable depreciation for restaurants and the IRA
charitable rollover. The IRA rollover permits IRA owners
over age 70½ to transfer up to $100,000 per year to public
charities tax free. It is available for both 2008 and 2009.
- Energy Incentives. The act adds incentives for
solar, wind and other renewable energy methods. There also
are provisions that will increase the use of oil shale and
"clean" coal.
- Mental Health. The Mental Health Parity Bill
provisions have been included. These are intended to expand
coverage of mental health conditions by placing them on the
same level as other types of illness.
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| This article came from Crescendo,
Gift Law Weekly dated 10/3/2008 |
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