Included in his proposal were several items on the top of the industry's wish list. [Bush] suggested modifications to the passive-loss restrictions in the 1986 Tax Reform Act; a $5,000 tax credit for first-time home buyers; a deduction for some homeowners who sell their properties at a loss; a loosening of rules to allow first-time home purchasers to withdraw $10,000 from their IRA accounts; and new rules to make it easier for pension funds to invest in residential real estate.

Some Not Satisfied Many real estate industry officials say the Bush proposals still don't go far enough. They object to certain provisions of the capital-gains tax proposal and have expressed concern that Bush's $5,000 tax credit proposal doesn't give home buyers any upfront cash to use for their home purchase.

In 1987, shortly after the tax reform package passed, the 750,000-member National Association of Realtors opened talks with members of Congress on how they could work to roll back some of its provisions. In 1988, Rep. Michael A. Andrews (D-Tex.) and Rep. William M. Thomas (R-Calif.) introduced a bill that would have restored some of the passive-loss provisions.