Federal housing bill contains Road Home tax relief

BATON ROUGE, La. (AP) - Tax relief for homeowners who paid higher bills because they received hurricane damage grants appears likely now that President Bush has dropped his opposition to a wide-ranging housing bill that includes the provision. Thousands of homeowners have paid increased taxes because they received Road Home grants of up to $150,000 while also claiming casualty losses from hurricanes Katrina or Rita in 2005. The Internal Revenue Service considered the grants a duplication of the 2005 tax break. The agency required people who received a grant and took a casualty loss deduction to add the value of the deduction to their 2007 tax returns as taxable income. The same requirement also applied to people who received grants through Mississippi's post-Katrina housing assistance program. Besides having to pay higher... [read full story]