HOUSE CLEARS MILITARY TAX RELIEF BILL FOR WHITE HOUSE ( good info !! )

[MORTARDUDE]

HOUSE CLEARS MILITARY TAX RELIEF BILL FOR WHITE HOUSE



NOVEMBER 6, 2003


AUTHOR: Mohr, Patti

Tax Analysts

The House on November 5 approved by a 420 to 0 vote a package of tax relief for members of the armed forces, clearing the bill for the White House. The bill would also suspend the tax-exempt status of terrorist organizations and would extend income and estate tax relief granted to victims of the September 11, 2001, terrorist attacks to families of astronauts who die in space missions.

The House vote on the Senate-passed measure concluded years of consideration by the House and Senate on tax relief measures for military members. The two chambers had sent several bills back and forth, making small changes each time. But a recent House vote on a $ 12,000 tax-free death gratuity benefit sponsored by Reps. Rick Renzi, R-Ariz., and Walter B. Jones, R-N.C., prompted the Senate to act on a larger package. The Senate ended a standoff with the House over a controversial individual expatriation provision by replacing it with an extension of Customs user fees through 2005, an offset the House finds more palatable.

"The Renzi bill is a huge bill," House Majority Leader Tom DeLay, R-Texas, said. "It took a freshman to get it done."

H.R. 3365, the Military Family Tax Relief Act of 2003 would

> increase the death gratuity benefit to survivors of U.S.
military members killed in the line of duty after September
10, 2001, from $ 6,000 to $ 12,000 and increase the tax-free
treatment of the benefit from $ 3,000 to $ 12,000;

> exempt extended official duty time away from home from the
five-year residence requirement that qualifies taxpayers for
a capital gains exclusion from the sale of a principal
residence;

> provide an above-the-line deduction of up to $ 1,500 for
overnight travel expenses such as transportation, lodging,
and meals for National Guard and reserve members;

> exclude amounts received under the Department of Defense
Homeowners Assistance programs;

> expand combat zone filing rules to contingency operations;

> modify membership requirements for some tax-exempt veterans'
organizations to include ancestors or lineal descendents;

> clarify the treatment of Defense Department dependent-care
assistance programs;

> treat military academy appointments as scholarships for
purposes of tax-preferred education savings accounts; and

> suspend the tax-exempt status of designated terrorist
organizations.