A cap on the value of tax-exempt municipal bond interest will likely be part of any tax reform discussions, a Treasury Department official said Monday.

“I know some of you have expressed concern with the president’s recent proposal to cap the income tax exclusion on a host of deductions, including mortgage and municipal bond interest,” Michael Stegman, counselor to the Treasury Secretary for Housing Finance Policy, told those attending the 2013 Legislative Conference of the National Council of State Housing Agencies. “Even though this limitation was not imposed in the recent legislation that postponed the fiscal cliff, a cap on the income tax exclusion will likely be part of any discussion of broader tax reforms.”

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