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New Tax Extender Provisions

December 19, 2014

With just under two weeks left in 2014, Congress has passed the tax extenders bill (also known as the Tax Increase Prevention Act of 2014). The bill now goes to President Obama, who is expected to sign it into law this week.

The following tax provisions that expired at the end of 2013 have been extended for the 2014 tax year.

Provisions Tax Increase Prevention Act
(H.R. 5771)
Itemized deduction for state and local taxes Extends for 2014
Above-the-line deduction for qualified tuition Extends for 2014
Above-the-line deduction of $250 for teacher classroom expenses Extends for 2014
Tax-free IRA contributions to charity after age 70 1/2 Extends for 2014
Deduction for mortgage insurance premiums Extends for 2014
Transit and parking fringe benefit equalization Extends for 2014
Exclusion for principal residence debt forgiveness income Extends for 2014
Health care tax credit for displaced workers Not extended
Research credit Extends for 2014
Qualified small business stock Extends to apply to stock acquired before Jan. 1, 2015
New Markets Tax Credit Authorizes additional $3.5 billion in tax credits for 2014
Reduced five-year holding period for S corporation built-in gains for dispositions Extends for 2014
Work opportunity tax credit Extends for 2014
CFC-related payment look-through rule Extends for 2014
Subpart F exemption for active-financing income Extends for 2014
Additional properties eligible for low-income housing credit Extends the 9% credit rate for 2014
Exclusion of military housing allowance for income test for low-income housing credit Extends for 2014
Indian employment tax credit Extends for 2014
Employer wage credit for active-duty employees Extends 20% credit for 2014
RIC-qualified investment entity treatment under FIRPTA Extends through 2014
Interest and short-term capital gains-related RIC dividends Extends for 2014
Conservation contributions of capital gain real estate Extends for 2014
Enhanced charitable deduction for gifts of food inventory Extends for 2014
Treatment of payments to controlling exempt organizations Extends for 2014
Basis adjustment to S corporation stock for charitable contributions of property Extends for 2014
Railroad track maintenance tax credit Extends for 2014
Mine rescue team training credit Extends for 2014
Bonus depreciation Extends 50% bonus depreciation for property placed in service in 2014 (2015 for certain long-lived and transportation property) and extends ability to claim unused alternative minimum tax credits in lieu of bonus depreciation
Section 179 expensing Extends the $500,000 expensing allowance and $2 million phase out threshold permanent, for property placed in service in 2014
15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements Extends for 2014
Three-year depreciation for racehorses Extends for 2014
Seven-year cost recovery for motorsports entertainment complexes Extends for 2014
Expensing for advanced mine safety equipment Extends for 2014
Special expensing for film and television productions Extends for 2014
Section 30D plug-in electrical vehicle credit Not extended
Credit for production of Indian coal Extends for 2014
Cellulosic (second-generation) biofuel credit Extends for 2014
Special depreciation for cellulosic biofuel plant property Extends for 2014
Incentives for biodiesel and renewable diesel Extends for 2014
Alternative fuel and alternative fuel mixture credit Extends for 2014
Alternative fuel vehicle refueling property credit Extends for 2014
Special rule for qualified electric utility dispositions to implement FERC or state restructuring policy Extends for 2014
Partial expensing of refinery equipment Not extended
Section 45 renewable electricity production credit Extends credit to property with construction beginning before Jan. 1, 2015, and extends ability to claim 30% Section 48 credit in lieu of Section 45. Grant in lieu of credit not extended.
Section 45M energy-efficient appliance credit Not extended
Section 45L energy-efficient new home credit Extends for 2014
Section 25C energy-efficient home improvement tax credit Extends for 2014
Section 179D deduction for energy-efficient commercial building property Extends for 2014
Additional five years to amortize funding shortfalls Extends through 2015
Special rules for severely underfunded plans Extends through 2015
Accelerated depreciation for Indian reservation business property Extends for 2014
Empowerment zone tax incentives Extends for 2014
Section 199 deduction for Puerto Rican production activities Extends for 2014
Increased limit on rum excise tax cover for Puerto Rico and the Virgin Islands Extends for 2014
American Samoa economic development credit Extends for 2014
New York Liberty Zone tax-exempt bond financing Not extended
Qualified Zone Academy Bonds Authorizes additional bonds in 2014

Trying to plan ahead for 2015? Unfortunately, these are not slated to be renewed for tax year 2015 unless the new Congress takes the matter up again. Stay tuned...

If you have any questions about these new provisions, please contact us.

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