Tax Benefits

THE NEW tax law, passed by Congress last summer, was custom-designed for investors and homeowners. The tax rates on capital gains were slashed. The profits on most sales of homes will no longer be taxed at all.But no good deed goes unpunished. This year, it takes 36 lines on the Schedule D to figure out what your capital-gains tax is going to be. Here's what's new:Taxable capital gains. You earn a capital gain when you sell an investment for a profit or when your mutual fund takes a cash profit for the year.

WASHINGTON -- The short, unhappy life of the Line Item Veto Act of 1996 should end soon. A federal judge has declared it unconstitutional, a ruling that probably will be quickly reviewed by the Supreme Court, which should put this misbegotten law out of its misery by July.However, the court will say only that the statute conferring this veto power on the president is constitutionally flawed, as any such statute would be: A constitutional amendment would be necessary to confer such power. It is important to understand why that is so, but equally important to understand why no line-item veto should be given to the chief executive of the national government of a continental nation.

In the tough years of the early 1990s, the states raised taxes that hit the poor harder than the affluent. Now that the booming economy has made the states flush with money, they are cutting taxes -- for the affluent.Sales and excise taxes, which fall more heavily on people at low income levels, were raised $11.7 billion from 1990 through 1993, data from the National Conference of State Legislatures show. These taxes have been cut by $200 million, or less than 2 percent of the amount of the increase, since 1994.

An article in yesterday's Carroll edition of The Sun should have said Russell Hughes was appointed to the County Commissioners after property for the Air Business Center was purchased.The Sun regrets the error.Nearly 30 years ago, the County Commissioners were accused of wasting tax dollars to create an industrial and business park north of Westminster -- an economic development project that, critics charged, wouldn't fly.But a study released yesterday shows the Air Business Center's economic impact on the county has been substantial.

Dear Mr. Gisriel:I'm thinking about buying a house instead of continuing to rent. Could you briefly summarize the tax advantages of homeownership?Donald ElliottCatonsvilleDear Mr. Elliott:Homeownership gives the buyer several major tax benefits that provide a powerful incentive to buy real estate.Owning a home is one tax shelter within reach of most Marylanders, especially if one of the many first-time homebuyer programs available from private or government sources is used.The following are the major tax advantages of home ownership: Mortgage interest deduction.

As someone who has always admired the nesting instinct in birds and small mammals but never understood the same impulses in humans, I should have viewed the idea of getting married -- and merging two households -- with some foreboding.But it was a first marriage for both of us, and though my husband and I were by most standards getting married at a late age, I, at least, was naive.I didn't give moving into his house of many years a second thought.This'll be interesting, said my brother and sister, who have been married for years.

Washington -- Flat and flatter tax proposals may be hot buttons on Capitol Hill in the new congressional session, but the closer homeowners and buyers look at them the less appealing they may turn out to be.In case you've missed the headlines, both the new majority leader of the House, Rep. Dick Armey, R-Texas, and the new minority leader, Rep. Richard Gephardt, D-Mo., are pushing plans that would radically simplify the federal tax system by imposing low, uniform tax rates on incomes for all taxpayers.

It isn't risk-free, and it can cost a bundle. But buying property to rent out can also earn you a tidy sum of money down the road and entitle Uncle Sam to less of your hard-earned cash now.Buying to rent is attractive, proponents say, for several reasons:* Rising interest rates are forcing would-be homebuyers to rent longer. That drives up demand for rentals. While higher rates also make it harder for investors to buy, investors usually already have a proven credit record and are more attractive to lenders.

A Warwick, R.I., company that has proposed a $12 million renovation of the condemned Bay Ridge Gardens apartment complex in Annapolis could learn tonight whether it will receive a 15-year property tax break from the city.The City Council is scheduled to consider a plan that would freeze the amount of taxes the Landex Corp. must pay the city over the next five years and keep increases over the following 10 years below 5 percent.Without the tax break, city taxes on the 197-unit, low- to moderate-income apartment complex could nearly double after the renovations are complete, said Alderman John Hammond, a Ward 1 Republican and chairman of the city Finance Committee.

When Marylanders rebelled against rising propert assessments in 1989, they told horror stories of working people and retired couples being taxed out of their homes.Maryland lawmakers listened. In the election year of 1990, they passed a law limiting the increase in property taxes people have to pay because of higher assessments.As it turns out, however, the major beneficiaries are well-to-do homeowners, not their working-class neighbors, according to a recent study of Baltimore County's 4 percent limit on assessment increases.