Brownfields (Tax Deduction) - Issue Summary
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| What is the fundamental issue? |
| Historically, the costs of site preparation for developers was capitalized into the cost of the land. In the late 1990's however, Congress enacted a temporary provision that would allow the costs of brownfields clean-up to be taken as a current deduction. This provided a substantial savings for developers. Because the provision was enacted as a temporary incentive, it has required renewal over the years. Most recently, the provision expired as of December 31, 2007. Brownfields are properties that are contaminated with non-petroleum chemicals and substances. |
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| I'm a Realtor®. What does this mean to my business? |
| If property developers can deduct the costs of cleaning up contaminants, a barrier to sale and development of a property may be eliminated. Property values will improve as contaminants are removed. |
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| NAR Policy: |
| NAR supports deductions for brownfield cleanup costs. |
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| Legislative/Regulatory Status/Outlook: |
| There is no controversy about the merits of the brownfields deduction or any of the other expired provisions. The deduction was renewed as part of the Emergency Economic Stablization Act of 2008 (the financial rescue bill) and extended through December 31, 2009. |
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