Commercial Issues and Actions

NAR Commercial Issues Brief – February 2014
Issue: Alternative Minimum Tax (AMT): On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act, providing a permanent “patch” that prevents tens of millions of taxpayers from being subject to the alternative minimum tax (AMT), starting with the 2012 tax year. Specifically, the measure sets the exemption amounts (i.e., the amounts yearly for inflation. It also allows various non-refundable personal credits to be claimed against the AMT. The AMT was created by the Tax Reform Act of 1986 to prevent higher-income taxpayers from using credits and deductions to completely offset their federal income tax liability.
NAR Action: NAR successfully worked with Congress to ensure a permanent patch to the AMT.
Issue: Basel III: The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of Currency (OCC) have finalized a new risk-based capital category – High Volatility Commercial Real Estate Exposures (HVCRE) for commercial acquisition, development, and construction (ADC) loans. Specifically, the new  changes raise the risk-weight for an ADC loan from 100% to 150%. In response to the final changes, it is highly likely that banks would be substantially change their current lending practices and reduce the amount of available credit in order to avoid the higher capital charges associated with ADC loans
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(NAR Issue Brief)