The Housing Assistance Tax Act of 2008 (“Act”) was signed into law by President Bush on July 30, 2008. While it makes many changes to the Internal Revenue Code, only a couple are of interest to high net worth taxpayers. For properties placed in service after December 31, 2007, the low-income-housing tax credit will now be available to offset the alternative minimum tax as well as the regular income tax. Similarly, for expenses incurred after December 31, 2007, the credit for qualified rehabilitation expenses will also be available to offset the alternative minimum tax.

The Act also contains a tax credit for first-time home buyers that may benefit some of your children. To qualify, the purchaser must be a first-time home owner who purchased his home between April 8, 2008, and July 1, 2009. The credit is 10% of the cost of the home, up to a maximum credit of $7,500. The credit is phased out between adjusted gross income levels of $150,000 and $170,000. A recent college graduate without too much investment income might qualify.