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DS News Webcast: Thursday 12/18/2014

The U.S. Senate passed a bill on Tuesday night that retroactively extends 55 tax provisions, among which are allowing deductions for mortgage insurance premium interest and tax relief on forgiven mortgage debt. The tax provisions covered by the bill, known as the Tax Increase Prevention Act of 2014, expired on December 31, 2013. The bill provides for a retroactive one-year extension which expires on December 30 of this year and would be effective for those filing 2014 returns next year.

H.B. 5771 was originally introduced by U.S. Representative Dave Camp, a Republican from Michigan, on December 1, 2014, and it passed in the House on December 3. Section 102 of the bill calls for an extension for homeowners to exclude forgiveness of qualified mortgage debt, the remaining mortgage loan balance when a home is sold in a short sale to avoid foreclosure, from their gross income when filling out tax returns. Section 104 of the bill allows taxpayers who own homes to count qualified mortgage insurance premiums as interest for the purpose of mortgage interest deduction.

The Federal Reserve announced Wednesday that it intends to take a slow approach to raising interest rates in the coming year, even as the economy continues to strengthen. In a policy statement released following the last 2014 meeting of the Federal Open Market Committee, the central bank reaffirmed its view that the economy is expanding at a "moderate pace," pointing to continued improvements in the labor market tempered by still-high numbers of unemployed and underemployed Americans and slower growth in the housing sector.

About Author: Jordan Funderburk

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