preciated over 27.5 years. Losses could be carried forward indefinitely and
would be increased to account for inflation and return on capital. Business
interest would no longer be deductible. Like-kind exchanges are not specifically addressed in the blueprint but would implicitly remain in the sense
that if a property were sold and another purchased, income would be recognized on proceeds from the sale but be immediately deductible up to the
cost of the replacement property.
NAA/NMHC are analyzing this piece of the House proposal in particular. On one hand, expensing and the resulting upfront deduction would
encourage the production of apartment housing and help alleviate the
shortage of workforce housing. On the other, eliminating depreciation and
business interest as expenses may have the effect of promoting the churning
of multifamily real estate, particularly once a property has stabilized and the
developer is recognizing income with fewer offsetting deductions. The
elimination of a business interest deduction could also impact borrowing
costs and disproportionately impact a capital-intensive apartment housing
industry that relies on debt.
Estate Tax: The proposal would repeal the estate tax. The current-law
rules call for a $5.45 million ($10.9 million per couple) exemption level, a
top tax rate of 40 percent and stepped-up basis.
LIHTC: The proposal unacceptably eliminates the LIHTC, a public/
private partnership that leverages federal dollars with private investment to:
produce affordable rental housing and stimulate new economic development
in many communities. The LIHTC has financed nearly 2.8 million apartments and served 13.3 million residents since its inception in 1986, and its
elimination would have a tremendous negative impact on the production of
affordable housing.
NAA/NMHC will remind lawmakers about the critical role the LIHTC
plays and make the case that it should be expanded rather than repealed.
Mortgage Interest and Charitable Deduction: The proposal eliminates
nearly all itemized deductions, including the write-off for state and local
taxes. Notably, the mortgage and charitable deductions are maintained but
will be indirectly impacted because far fewer taxpayers will itemize due to
an increase in the standard deduction.
Keeping the World Safe
from Lawyers, one
Trip Hazard at a time!
NAA/NMHC Working to Turn Back Overtime Rule
LOCALLY OWNED AND OPERATED SINCE 2003
NAA/NMHC sent a detailed comment letter to the House Committee
on Education and the Workforce on June 6 urging the swift approval of the
“Protecting Workplace Advancement and Opportunity Act,” which would
overturn the Department of Labor’s (DOL) final overtime rule issued last
month. The legislation would also require that a comprehensive economic and
impact analysis be conducted prior to a subsequent rule being finalized.
Specifically, the DOL’s final overtime rule lifts the overtime pay threshold
from $23,660 to $47,476 – impacting an estimated 4.2 million workers nationwide. Effective December 1, 2016, executive, administrative and professional employees who are paid by the hour, or earn less than the threshold, will
be eligible for overtime pay.
Our letter was sent in advance of the Committee’s scheduled June 9 hearing focused on examining the final overtime rule. NAA/NMHC have continued to work to overturn this rule since its initial introduction because, in
part, it would harm the ability of multifamily employers to implement, and
their employees to take advantage of, flexible scheduling options. The final
rule would also limit career advancement opportunities for employees.
NAA/NMHC also joined with the Partnership on Protecting Workplace
Opportunity (PPWO) to send another letter demonstrating the wide range
of businesses that the rule would harm. We are working closely with the
PPWO to turn back the rule.
www.aamdhq.org
AFTER
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AUGUST 2016 • TRENDS | 35