One interesting provision offered by [George Bush] would allow homeowners who have incurred losses on the sale of their homes to deduct the losses from their taxes via a casualty loss formula, as though they had been the victims of a fire or storm. Under existing law, the loss on the sale of a residence is not tax-deductible.

Bush's commercial real estate provisions were widely approved by people in the real estate industry. In particular, they cited the restoration of "passive losses," which allow real estate firms to deduct losses from one real estate venture against profits made from another, as an overdue correction of a long-standing inequity.

ILLUSTRATION,,Stephen Turk For Twp;PHOTO;CHART CAPTION:ON THE ONE HAND... Experts disagree about the effects President Bush's realestate related proposals could have on the economy. These are some of the most common-and sometiems contradictory-guesses: $5,00 TAX CREDIT FOR FIRST - TIME HOME BUYERS Could stimulate sales and construction activity Could freeze market while buyers wait to see what Congress does TAX DEDUCTION FOR LOSSES ON HOME SALES Could stimulate sales activity by encouraging sellers to face up to losses Could have no noticeable effect CAPITAL GAINS TAX CUTS Could spark sales activity among prime commercial properties Could cause the rest of the package to unravel because this is one so politically controversial PROVISIONS FOR PASSIVE LOSSES Could help financially troubled proberty owners Could reduce property forclosure rate