Sohodojo Advisory Board Member
Jim Schneider
The Taxman86 Speaks...
10 October 2000
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Open Letter to Vice President Al Gore, Chr. Community Empowerment Board, Chr. William Roth, Senate Finance Committee, Ranking Member Mr. MOYNIHAN and all the 18 other cosponsors. What happened to the 115 Enterprise Communities?

S. 3152 "Community Renewal and New Markets Act of 2000," the $38B upgrade of the $17B H.R. 4923 "Community Renewal and New Markets Act" which passed the House on July 25, 2000, is something to behold. Check out the Joint Tax Committee's Description and their cost analyst. and , which came out last Friday.

Then go to and check out S. 3152 in detail. "...Latest Major Action: 10/3/2000 Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time. (text of measure as introduced: CR ) Title: A bill to amend the Internal Revenue Code of 1986 to provide tax incentives for distressed areas, and for other purposes..." and see what the Chairman and the Ranking Member had to say about this $38B catch all bill for all the special interest groups, including the 1% Commuters who take Amtrak from Boston to New York, to Washington, D.C.

We suggest that someone ought to check out the following:

• "...TITLE VII--ADDITIONAL TAX PROVISIONS



• SEC. 701. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD OF ACCOUNTING. [This is very interesting!]



• SEC. 702. REPEAL OF SECTION 530(d) OF THE REVENUE ACT OF 1978.[$203B relief package for high tech]



• SEC. 703. EXPANSION OF EXEMPTION FROM PERSONAL HOLDING COMPANY TAX FOR LENDING OR FINANCE COMPANIES. [$237B Relief package for the wealthty]



• SEC. 704. CHARITABLE CONTRIBUTION DEDUCTION FOR CERTAIN EXPENSE INCURRED IN SUPPORT OF NATIVE ALASKAN SUBSISTENCE WHALING.



• SEC. 705. IMPOSITION OF EXCISE TAX ON PERSONS WHO ACQUIRE STRUCTURED SETTLEMENT PAYMENTS IN FACTORING TRANSACTIONS..."

all of which cost significantly more than the $200M Enterprise Communities Tax Incentive Amendment, or

• "...TITLE III--TAX INCENTIVES FOR URBAN AND RURAL INFRASTRUCTURE



• SEC. 301. INCREASE IN STATE CEILING ON PRIVATE ACTIVITY BONDS.



• SEC. 302. MODIFICATIONS TO EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.



• SEC. 303. BROADBAND INTERNET ACCESS TAX CREDIT.



• 'SEC. 48A. BROADBAND CREDIT.



• SEC. 304. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.



• `Subpart H--Nonrefundable Credit for Holders of Qualified Amtrak Bonds



• `SEC. 54. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.



• SEC. 305. CLARIFICATION OF CONTRIBUTION IN AID OF CONSTRUCTION.



• SEC. 306. RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN LEASEHOLD IMPROVEMENTS..." [This is the sleeper at $2B which will allow all lessees to use 15yrs. life for improvements to leased property vs. 39 yrs. SL] for $11B which is more than all of the Distressed Communities Items combined.

That is the bad news, the good news is that proposed IRC Section 1397B in S. 3152, which will cover all existing Empowerment Zones [31] effective upon enactment, and Renewal Communities [30] on January 2002 provides for ZERO Capital Gains, subject to a lifetime maximum of $25M per married couple [$12.5M if filing separately] and $50M if you live together. This will be called the Silicon Valley marriage penalty. It will also allow $25M per child, and per C Corporation. This provision will bring the high tech to Empowerment Zones and Renewal Communities, you heard that here first, and make the creative ones very RICH!

Washington, D.C.'s Enterprise Zone which has it own IRC Section 1400B will be amended to cover all of Washington, D.C., as of January 1, 2001 with NO $25M cap per family.

What if IRC Section 1397B was amended to include Enterprise Communities, such as those in Alaska, New York, Delaware, Utah, Florida, Tennessee, Nebraska, Iowa, North Dakota, Montana, Rhode Island, Virginia, West Virginia, Nevada, Minnesota, and Vermont [these are the states of the various co-sponsors of S. 3152 and of the Chairman and Ranking Member]. Hopefully the business communities within those Enterprise Communities, including Bridgeport, Conn, Nashville, Tenn, or Littlerock, Ark, will let out a big scream within days of the passage of this proposal, which will be a few days before November 5, 2000. We look forward to seeing this all unfold, along with the other goodies in the $300B tax package.

Jim Schneider, LL.M.
Taxman86

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