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Article: New York City officials seek relaxation of private loan limits in the federal tax law.
- Article from:
- The Bond Buyer
- Article date:
- October 11, 1993
- Author:
CopyrightCOPYRIGHT 1993 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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WASHINGTON -- New York City officials are seeking relief from the federal tax law's limits on private loans, which they say unfairly penalize the city and other large tax-exempt bond issuers.
The 1986 Tax Reform Act limits to $5 million or 5%, whichever is less, the amount of tax-exempt governmental bond proceeds that can be loaned to private parties. A bond issue exceeding these limits is a private-activity bond issue that will be taxable if it is not used to finance specified projects.
New York City officials asked the Treasury Department in a recent letter to support the elimination of the $5 million limit. Large issuers, whose tax-exempt governmental ...