Congress Passes Tax Increase Prevention Act of 2014

Tax Increase Prevention Act

On December 16, 2014 the Senate passed the Tax Increase Prevention Act of 2014.

The Senate passed the bill without amendment to the House of Representatives bill and the legislation is expected to be signed into law by President Obama. The bill will provide for one year extensions of certain business and individual tax provisions that expired in 2013 as well as technical corrections.

Tax Increase Prevention Act: Extended Provisions

Key business provisions renewed through December 31, 2014 include the research credit, 50-percent bonus depreciation, look-through treatment for controlled foreign corporations (CFCs), and a Subpart F exception for active financing income.

Also included among the more than 50 expired tax provisions being renewed for 2014 are the following:

  • 15-year recovery for qualified leasehold, restaurant, and retail property
  • Work opportunity tax credit
  • Sec. 179 small business expensing up to $500,000
  • 50% Bonus depreciation
  • Reduction in S corporation built-in gains holding periods
  • Deduction for State and local general sales taxes
  • Discharge of indebtedness on principal residence
  • Extension of the railroad track maintenance tax credit

Technical Corrections in Tax Increase Prevention Act

The Tax Increase Prevention Act also includes provisions for technical corrections. These technical corrections address a number of business tax provisions enacted since 2004, including proposals affecting elections to claim alternative minimum tax (AMT) credits in lieu of bonus depreciation, section 199 domestic manufacturing deduction, certain energy tax provisions, depreciation rules for leasehold improvements and smart meters, and regulated investment companies.

Please keep in mind that these are just a few of the provisions that could affect you or your business and that these extensions will apply to 2014 only. Additional legislation will be required to extend them past December 31, 2014.

We will let you know as soon as the legislation is signed into law. However, since passage is likely and the time is short for your business to take advantage of these changes, please call us to discuss possible moves to consider before year end.

BKM Sowan Horan, LLP
Rick Sowan [email protected] 214 545 3971
Tim Horan [email protected] 214 545 3969
Mike Barber [email protected] 214 545 3973
Trey Kennedy [email protected]  214 545 3972
Brad Marckx [email protected] 214 545 3970