Tax relief for Gulf Coast residents affected by Hurricane Katrina could be approved and on the desk of President Bush by late this week under an agreement House and Senate negotiators hammered out late Tuesday.[@@]
“I anticipate quick passage of this bill in both the House and Senate, followed by the president’s signature, so that the victims of Hurricane Katrina can begin to immediately benefit from this tax relief,” says Rep. Jim McCrery, R-La.
The House could act on the final version of the bill today, and the Senate could act by the end of the week.
Provisions of the final version of the bill would:
- Increase the limit on tax-deductible casualty losses.
- Extend the period in which homes or businesses have to recognize gains on property damaged or destroyed as a result of a federally designated catastrophe.
- Waive the 10% penalty on early withdrawals of funds from retirement plans for individuals living in federally declared disaster areas.
- Let taxpayers exclude from gross income otherwise taxable individual retirement withdrawals used to make charitable contributions.
- Ease some of the usual restrictions on deductions for charitable contributions.
- Raise the permitted individual limit for cash charitable contributions to 60% of gross income, from 50%, for donations made this year.
- Give the IRS commissioner permission to extend deadlines for filing tax returns and paying income, estate and gift taxes.