2009 HSA LIMITS RELEASEDWashington, D.C. — The Internal Revenue Service has published the 2009 inflation-adjusted deduction limits for health savings accounts.

For calendar-year 2009, the annual limitation on deductions for an individual with self-only coverage under a high-deductible health plan is $3,000. For 2009, the annual limitation on deductions for an individual with family coverage under a high-deductible health plan is $5,950.

For 2009, a high-deductible health plan is defined as a health plan with an annual deductible that is not less than $1,150 for self-only coverage, or $2,300 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments and other amounts, but not premiums) do not exceed $5,800 for self-only coverage or $11,600 for family coverage.


Washington, D.C. — The Internal Revenue Service has released a revenue procedure dealing with the tax effects on securitized mortgages that have been modified to avoid foreclosures.

Revenue Procedure 2008-28 describes conditions under which modifications of certain mortgage loans will not cause the IRS to either challenge the tax status of some types of securitization vehicles that hold the loans or to assert that the modifications create a liability for tax on a prohibited transaction.

Many servicers of mortgages have developed foreclosure-prevention programs, the IRS noted. They have been applying the programs both to loans that investors hold directly and to loans held through securitization vehicles, such as investment trusts and real estate mortgage investment conduits. The revenue procedure goes on to describe features of both types of vehicles and gives specific examples of how the rules can be applied.

The revenue procedure governs determinations made by the IRS on or after May 16, 2008, with respect to loan modifications effected on or before Dec. 31, 2010. The IRS has invited public comment by July 15.


Washington, D.C. — In a 7-2 vote, the U.S. Supreme Court ruled to uphold the tax exemptions that states and localities afford to their in-state municipal bonds. The ruling by the High Court overturned an appellate court decision in Kentucky that stated that the practice discriminated against out-of-state bonds, and therefore was in violation of the Constitution.

Writing for the majority, Justice David Souter agreed that the states can give a tax break to purchasers of in-state bonds without violating the U.S. Constitution, and that therefore it was not a case of unfair protectionism.

The case stems from a 2003 lawsuit, Department of Revenue of Kentucky v. Davis, in which a Kentucky couple sued the state government after it mandated that they pay state taxes on municipal bonds they held from other states.

Municipal bonds, which are often used to finance such projects as highways and schools, are estimated to be roughly a $2.5 trillion market.

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