The R&P Report for Monday, September 27, 2010 ...

http://www.nwyc.com/

Vol. 14 No. 2-28

Monday, September 27, 2010

REVIEW

Voting Day Reminder: midterm elections Nov. 2.

Small-Business Bill: The House cleared a small-business measure sending it to the President to sign into law. The bill would establish a $30 billion lending fund to provide community banks with capital for small business loans. The measure includes $12 billion in tax incentives aimed at small businesses. It would revive an expired bonus-depreciation provision and allow all capital gains from certain small-business stock to be excluded from taxation. (H.R. 5297)

National Defense Bill: The bill is on hold after Democrats amended it with a provision that would extend legal status and a path to citizenship for certain children of illegal aliens. It also included language that would eliminate the ban on gays serving openly in the military. Lawmakers voted not to bring the measure to the floor for a vote. (S.3454)

Expiring Tax Cuts: Senate Democrats signaled that they are unlikely to schedule a vote on extending the expiring 2001 and 2003 (Bush) tax cuts before Congress leaves Capitol Hill for the campaign trail this week. (S.3816)

Cyber-security: The leader of the Pentagon’s Cyber Command asked lawmakers to continue to provide funding to the new unit as it works to find ways to combat threats to computer networks. (S.773) (S.3480)

Food Safety: A Senate Committee approved a measure to strengthen criminal penalties for companies and individuals that knowingly violate food safety standards. The bill would increase penalties for distributing tainted food products and establish fines and prison sentences of up to 10 years for violations. Under the measure, such an offense would be a felony. (S 3767)

“Fair Elections Fund”: A House panel approved a bill that would provide public financing of congressional elections to the House. It would provide primary and general election candidates who abide by certain restrictions with federal financial support from a newly created “Fair Elections Fund” and would receive 400 percent matching payments for certain small-dollar contributions. The bill would use proceeds from spectrum (electromagnetic wavelengths) auctions to help finance political campaigns. (H.R.6116)

Click here to express your opinion or go to www.nwyc.com

Campaign Finance Bill: The Senate again rejected (59-39) an effort by Majority Leader Harry Reid to call up a campaign finance disclosure measure. GOP members united against the bill. (S.3628)

Prescription Drug Monitoring: The House passed a bill aimed at preventing drug abuse. It would reauthorize a program to assist states in monitoring prescription drug use and would authorize $15 million for fiscal 2011 and $10 million annually from fiscal 2012-2013. (H.R.5710)
Autism Grant: The House passed a measure to expand aid to those with autism and their families. The bill would authorize $17 million annually for fiscal 2012-16 for grants for services rendered to children and adults with autism. (H.R. 5756)

PREVIEW

Continuing Resolution (CR): The Senate is expected to pass a short-term CR to fund most government operations past the end of the 2010 fiscal year. It may contain extra funding for the Pell Grant program for low-income college students.

Child Nutrition: The House is expected to consider legislation that would authorize the first increase in decades for per-meal reimbursement to schools. (S.3307) (H.R.5504)

China Currency: The House is expected to advance a bill aimed at China’s currency practices. Many experts say that China maintains the yuan at an artificially low value to keep Chinese exports cheap and imports expensive. (H.R.2378)

The Week Ahead: Before Oct. recess, lawmakers in both chambers will address a CR to keep the government funded. The House is expected to address a loan guarantee program for home construction and a child nutrition measure. The Senate will address a Social Security payroll tax bill.

Click here to view the R&P Report as a PDF

Early voting has begun for the 2010 General Election on November 2, 2010 in the State of Iowa.

Both parties pushing the early vote - The Des Moines Register

• Need to Register to Vote in Iowa? pdf link!
• Obtain an Absentee Ballot in the State of Iowa

ttrco

Health Care Reform will impact Small Business America with increased IRS 1099 reporting

Today's hot political affairs topic, from a meeting we attended this morning is HR. 5297. Here's the update we received:

Update on IRS 1099 Reporting Requirement

Many of you may have seen an email from ASAE on the IRS 1099 Reporting Requirement. NAR (National Association or Realtors) has been working on this issue and wanted to provide you with a legislative update.

The health care legislation enacted earlier this year included a controversial and burdensome new requirement, effective in 2012, that would require all businesses to provide IRS 1099 information returns to any vendor (and to the IRS) when the business makes payments of more than $600 to the vendor in any calendar year. This 1099 reporting provision came out of nowhere in the final days of the health care debate.

No sooner was the ink dry on the bill itself than efforts began to repeal the new 1099 rule. Many REALTOR organizations are aware that ASAE is among the groups opposing the new rule. NAR has signed on to the ASAE letter to signal its opposition to the 1099 reporting requirement. When Congress reconvenes in mid-September, among the pending bills is a small business bill (HR 5297) that includes a modest tax title. (The bill has several non-tax provisions that NAR fully supports.) HR 5297 is expected to be brought up some time during the week of September 13.

When the Senate considers HR 5297, there will be a two-part amendment procedure related to the 1099 requirement. The first part will be an amendment that would completely repeal the 1099 requirement. That effort is expected to fail. The second will be an amendment offered by Majority Leader Reid (D-NV) and Finance Chairman Baucus (D-MT) and others. That amendment would limit the application of the 1099 reporting requirement so that only employers with more than 25 employees would be subject to the 1099 reporting requirement. Further, only payments of more than $5000 would have to be reported. That amendment is expected to pass.

While the full repeal has broad support among ASAE members and in the small business community, we would anticipate that the 25 employee threshold would mean that most local boards and many state associations would be exempt from the reporting requirement. Similarly, the 25 employees threshold should provide adequate relief for most of our members. (Real estate sales agents are independent contractors, and so would not be included as employees of their respective brokers.) The $5000 threshold for reporting will also provide substantial relief to members and to associations.

At such time as HR 5297 (with some sort of 1099 amendment) achieves final passage in the Senate, it will have to go back to the House. The House version of the bill is substantially different from the Senate version. The House will then have two choices: It may simply pass the Senate version of the bill and send it on to the President, or it may request a conference between the House and Senate to reconcile their different versions of the bill. (Note that a conference would involve at least 4 different committees, so could be a cumbersome process.) We presently have no prediction of which option the House would choose. Congress plans to adjourn for the election on October 8. A post-election lame duck session has already been announced, so this 1099 issue may remain unresolved for a few months.

Note that the IRS has made public statements that it does not have adequate capacity to process all of the 1099s that would be filed if the health care bill's reporting requirement remains in the law as originally enacted. The IRS public statement should bolster the effort to eliminate or significantly narrow the application of the new reporting provision before it comes into effect in 2012

*** *** ***

HR 5297 Hits Turbulence in Senate‎ - National Underwriter Life and Health Insurance News
Backers of HR 5297, the Small Business Jobs Act bill, today had trouble getting the bill to the Senate floor. Members of the Senate voted ...

Who's Really Leaving Small Business Behind?‎ - Shopfloor

This bill will increase paperwork on the backs of an economy that is witnessing poor job growth, high unemployment and increasing strains on the American Dream and on Main Street.

ttrco

Tax Policy impacts on Real Estate: Fact and Fiction, after Health Care Reform ...

What's ahead in Washington D.C. after Health Care Reform. There is some Tax Policy discussions that caught our eye today.

This morning we received our R&P Report from National Write Your Congressman, which included a section that could impact S Corp and self-employed. Many in the Real Estate Industry are self-employed.

Tax Writers and S Corporations: Lawmakers looking for
revenue to offset the costs in a tax bill are taking a close look at certain
types of small businesses. They are considering a provision that would make it harder for owners of those companies to avoid paying employment taxes.

A similar provision that would have affected companies organized as S
corporations was included in a 2007 proposal. That provision would have required employees who are also owners of service businesses to pay self-employment taxes on their profits. (H.R. 4213)
To voice your opinion on this issue, go to www.nwyc.com.

We made a phone call to our local association, with some concerns about upcoming legislation this week in Washington D.C. Another item was relayed to us, which turned out to be false, but it highlights the frustration with current public policy discussions in Washington D.C. today.


What is Fact and what is Fiction?

There is a lack of accountability and transparency with Health Care Reform, current Banking Reform and how proposed legislation rules are being addressed, discussed and disclosed. In some cases, the rules will follow the Federal Legislation, which leads to transparency and accountability problems, like the following.

The following appears to be false, after receiving an E-mail about it earlier today:

Have you received this E-mail circulating on the Internet?

Real Estate sales tax

Under the new health
care bill - did you know that all real estate transactions are subject to a 3.8% Sales Tax?

If you sell your $400,000 home, this will be a $15,200 tax. (The copy of the article in the E-mail had $200,000 home and a $7,600.00 hand written as tax.)

Health
law's heavy impact - Spokesman.com - March 28, 2010
Mar 28, 2010 ... From now on, the federal government will manage the health care of all Washingtonians. ... The Spokesman-Review The Pavilion. Health law's heavy impact. Paul Guppy Special to The Spokesman-Review ... (this is an Web link to the E-mail rumor)

It appears that this printed article, which was shown in a E-mail circulating on the Internet and the Web Link above are untrue. With the lack of accountability and transparency in Washington D.C. today by those in the Administration and many in Congress, it's hard to know Fact vs. Fiction ...

Here was an explanation e-mailed from our State Association to our Local Association on this issue.

Sent: Mon Apr 26 11:45:47 2010

Subject: Re: Fw: Real Estate sales tax

No 4.0% "Sales Tax" on Home Sales In Recently Enacted Health Reform
Bill

Contrary to reports that are circulating widely on the Internet, there is
not a 4.0% "sales tax" or "transfer tax" on the sale of a home included in the
recently signed health care reform bill. The analysis underlying these reports
is incorrect and fails to take into account the interplay of the bill's
provisions with already existing real estate tax laws that remain
unchanged.

What was included in the health bill is a provision that imposes a new 3.8%
Medicare tax for some high income households that have "net investment income."
Any revenue collected by the tax is dedicated to the Medicare hospital insurance
program. This new tax will only apply to households with Adjusted Gross Income
(AGI) of more than $200,000 for individuals or more than $250,000 for married
couples. Since capital gains are included in the definition of net investment
income, an additional tax obligation might result from the sale of real
property.

In the case of the sale of a principal residence, the existing
$250,000/$500,000 exclusion from capital gains on the sale of a principal
residence remains unchanged. Consequently, even when the AGI limits are met, the new tax would not be applied to all capital gains that result from the sale of
a home. The new Medicare tax would only apply to any home sale gain realized in
excess of the $250K/$500K existing primary home exclusion that pushes the
filer's AGI over the $200K/$250K adjusted gross income limit.

The new Medicare tax will not take effect until January 1, 2013.

For more information on the new Medicare tax, please consult NAR's Health
Reform Q&A on this and other provisions of the new health reform law located
at www.realtors.org/healthreform.

End of E-mail

Information is deemed reliable but is not guaranteed and should be independently verified.

Don't miss the $8000 tax credit: very little time left.

ttrco

Attended the March Government Affairs Meeting of the CRAAR

Robin Tucker attended the Cedar Rapids Area Association of Realtors® this morning at 8:30 a.m. at the Association's conference room.

• Meeting with Federal Candidates discussed
• RPAC
• Federal Hill Visits
• IAR Video Call on State Legislation update
• House will hopefully work on Private Transfer Fees this week as the State Legislature works to close out the Legislation Session by the end of the month: Budget
• Discussed legislation that have passed and failed
• Chapter 29 and other local public policy issues

ttrco

How far will the U.S. Government reduce Itemized Deductions in 2010, such as the Mortgage Interest Deduction?

The National Association of Realtors' Eye on the Hill featured the subject ...

Protecting the Mortgage Interest Deduction

Eye on the Hill - February 2010 Edition (PDF: 200K) >

Major Highlight:

• The mortgage interest deduction has been part of U.S. tax policy since the federal tax code was first enacted in 1913.

What are some members of Congress saying on this important issue?

In the past, most Members of Congress have supported our views and also opposed changes to the MID. Senator Max Baucus, Chairman of the Senate Committee on Finance, and Representative Charles Rangel, Chairman of the House Ways and Means Committee, along with their other colleagues, pointed out in 2009 that changes to itemized deductions were ill advised stating "some of the reforms and offsets contained or referenced in the budget, such as the limitation on itemized deductions, raise concerns and will require more study as we determine the best policies for getting America back on track."

ttrco

Great News for Home Buyers with Extention and Expansion of Home Buyer Credit

We received the following E-mail recently from the Realtor® Action Center

Dear Robin,

You did it. You’ve succeeded in achieving a huge victory for real estate. Congress heard you on the need to both extend and expand the homebuyer tax credit to continue stimulating the housing sector of the economy. The Senate voted 98-0 on Wednesday and yesterday the House voted 403-12 on legislation that includes the extension and expansion of the credit. The President is expected to sign the legislation, perhaps as early as today.

Thank you for making this victory happen. Your letters in response to our Call for Action made a very big difference, as did the thousands of REALTOR® phone calls, visits by Federal Political Coordinators—all members of NAR—in getting this legislation passed. This is a great victory for the economy, for homebuyers, and for all of you in real estate. You made your case to Congress. We deeply appreciate your commitment and involvement on this issue and trust your continued support will follow in the weeks ahead on all our future Calls for Action.

More information on the tax credit and what it means to you:

• Changes to the Homebuyer Tax Credit Law


• Frequently Asked Questions About the New Bill


• Listen to NAR President Charles McMillan's Podcast About the Bill Passing


• See How the House Voted In Depth: 2009 First-Time Homebuyer Tax Credit


• Watch the Entries in the Tax Credit REALTOR® Party Video Contest

ttrco

A Luncheon Review for the Mortgage Industry

Robin Tucker, Realtor®, Broker/Officer, with Tommy Tucker Realty Co. is planning to attend Bank of America Home Loans presentation of "A Luncheon Review of the Mortgage Industry."

Topics:

Lending Trends/Challenges for 2009 Q4 and 2010 Recent Legislative Changes for the Mortgage Lending REO and Short Sales Process and Procedures

Presented by Doug Winter, Senior Vice President

Bank of America Home Loans

ttrco

Federal Housing Legislation update for 3/2/09

Per National Write Your Congressman e-mail:

Bill to Avert Foreclosures Postponed: The House voted to postpone floor
consideration of a bill that would allow bankruptcy judges to modify home loans.
Lawmakers cited fierce lobbying against the bill by the financial services
industry, along with other factors, as a reason for the delay. (H.R.1106)

ttrco