Volume 10, Issue 45 For the week of December 11, 2006 BREAKING NEWS The House just passed H.R. 6111, a bill expanding and extending certain provisions of the U.S. Tax Code, and called on the Senate to pass the package before they adjourn. Included in the bill are several of the Mortgage Bankers Association's legislative priorities - a deduction for mortgage insurance premiums, cost recovery for qualified leasehold improvements and an extension and expansion for expensing of brownfields remediation costs. "We are very pleased the House has included these provisions which are vital to the real estate finance industry," said Kurt Pfotenhauer, MBA's Senior Vice President for Government Affairs. "The MIP deduction is another step that makes the dream of homeownership affordable for more Americans. Many potential first time homebuyers do not have 20 percent for their down payment and thus rely on mortgage insurance to secure their loan. Making their mortgage insurance payments tax deductible has the potential to save them hundreds of dollars each year." "The brownfields expensing provision is crucial in the effort to increase the number of brownfields redevelopment projects and to foster community investment. Equally as important, the leasehold improvement section of the bill provides a recovery period for leasehold improvements that more closely tracks the actual life of the improvements. MBA has long advocated bringing the tax depreciation treatment of leasehold improvements more in line with economic depreciation." Specifically, the bill amends the Internal Revenue Code of 1984 as follows: - Allows individuals to deduct from their income any premiums paid or accrued for qualified mortgage insurance. This provision is good through the end of 2007 and contains a phase-out for those with incomes over $100,000. - Extends the expensing of brownfields remediation costs through the end of 2007 and expands the program to include petroleum sites. - Extends the existing leasehold improvement provisions through the end of 2008. "The House has completed their work on the bill, it is now time for the Senate to finish the job," continued Pfotenhauer. "It is incumbent upon them to pass this bill before they adjourn."