A move is afoot on Capitol Hill to help out homeowners who refinanced their mortgages and now discover that the Internal Revenue Service severely limits the deductibility of "points" commonly charged by lenders.
Rep. Raymond J. McGrath (R-N.Y.), a member of the Ways and Means Committee, said this week that he is pressing the House-Senate conferees to tack onto the tax overhaul bill a provision that would make the points deductible in the year paid.
McGrath said there is widespread support for the deduction, and in view of that indicated he is hopeful that the conferees may go along with him.
The deductibility of points has long been somewhat hazy, but until recently it was widely assumed that they could be deducted when paid as interest. In May, however, the IRS ruled that, in a refinancing, the points must be deducted over the life of the loan. By contrast, points paid in the purchase of a home may be deducted immediately.
The ruling is retroactive, McGrath noted, meaning that the IRS may disallow deductions taken in the past. "This is a fairness issue -- Congress needs to ensure that homeowners who pay points in refinancing are treated no differently than those who pay points when they purchase their homes," he said.
A point is an amount equal to 1 percent of the loan. Lenders often charge three or more points for making a loan.
The longest-running land dispute in the area's history ended this week as construction began on Somerset House, a 20-story luxury condominium on Wisconsin Avenue just over the District line in Montgomery County.
Somerset House is being built on the Bergdoll tract, 18 prime acres opposite Saks Fifth Avenue that developers have been trying to build on since 1944. High-rise construction there has been vigorously opposed by residents of the tiny Montgomery town of Somerset and the issue has been litigated from here almost to eternity.
But now permits have been issued and the first of three towers is under way. It will contain 159 units, ranging up to more than 4,000 square feet in size and up to $1.2 million in price. The project will feature indoor and outdoor swimming pools, racquetball and tennis courts, steam, sauna and massage rooms, plus other amenities.
The developer responsible for a renaissance of historic inns in Annapolis has been chosen to build a modern hotel and conference center to serve visitors to the Naval Academy.
Paul Pearson, head of the College Creek Partnership, was named to create an inn proposed by the Naval Academy Athletic Association on the banks of College Creek.
Marriott Corp. was chosen to build the inn, but construction still faces such obstacles as property acquisition, zoning approval and the apprehension of some environmentalists.
The athletic association, a nonprofit group that funds intercollegiate sports at the academy, also proposed the inn as a money-maker.
A spokesman for Marriott said the inn would be one of the first in a group of all-suite hotels it is building around the nation.
Negotiations to sell twin, 51-story office towers owned jointly by Atlantic Richfield Co. and BankAmerica Corp. in Los Angeles collapsed because of concerns by prospective buyers over the buildings' asbestos insulation and tax reform legislation, the companies say. The companies said the talks collapsed last month, but offered differing assessments of whether another buyer will be found.
Arco spokesman Al Greenstein said this week his company still expects to find a buyer, and Joe Faulkner, president of a real estate agency retained by Arco, estimated a buyer will be found by the end of this year.
But Daniel Costello, senior vice president for real estate at BankAmerica, said he doesn't believe the bank will get a satisfactory offer from three or four other potential buyers being considered.