The Distressed Communities legislation starts to unfold; Where the REAL CREATIVE ONES do their dirty work; The Marriage Penalty Repeal Plus.
1. S. 2779 "The American Community Renewal and New Markets Act."
The Taxsavings.Bigstep.Com home page has it all including a direct connection to S. 2779 which is the beginning, effective dates and all. One of the key provisions is the adoption of IRC Section 1397B, the Capital Gains Roll Over for Empowerment Zone Investments made after December 31, 2000. There is talk to move that date back to the original designation of Empowerment Zones, December 1994, but that is an open question. The House Bill covering the same material is still being drafted and will go to the House Ways and Means Community in early July.
The New Markets Credits Program, 39% over 7 years is very interesting in that it includes equity investments to Specialized Small Business Investment Companies [SSBICs] which are also covered by IRC Section 1044. The Distressed Community areas that will be covered by the New Markets Credits and the Venture Capital programs are broader then the Empowerment Zones, Enterprise Communities, and proposed Renewal Communities, and follows the HUBZone program. Thus it would appear that many downtown areas, including all of downtown San Diego will qualify for the New Markets Credits Program and Venture Capital. Will this save the Ballpark/Entertainment District? Does anyone really care?
The San Diego Enterprise Community is located in the area covered by the Ballpark/Entertainment District, subject to many law suits over city funding, much of which will become moot under the proposed Distressed Communities legislation, we believe.
2. How to have a vacation and do financial planning at the same time.
Check out this list of countries that appear to have creative tax systems designed to hide money and save world wide taxes, which is now under coordinated attack. In addition there are an additional group including Israel, Russia, the Cayman Islands, etc., that are working to get off the bad list.
3. The Learned Ones, the Senate Finance Committee, will Markup the Marriage Penalty, and it will be on President's Desk next Month, subject to a veto.
The Marriage Penalty will be revised, and the Chairman of the Finance Committee is pushing for doubling of the 18% and 28% bracket amounts, to be phased in over many years, and other things. The House passed bill would double the 18% bracket, along with doubling the standard deduction. Will this bill along with Death Tax, Education Reform, and Prescription Drugs make it into law, many doubt it, but may be the President can bring his leadership to bear for his legacy.
Jim Schneider, LL.M.
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