American Taxpayer Relief Act Has Extenders

Feb. 4, 2013 - PRLog -- Individual Tax Provisions

Exclusion Of Cancellation Of Indebtedness On Principal Residence- Cancellation of indebtedness income is includible in income, unless a particular

exclusion applies. This provision excludes from income cancellation of mortgage

debt on a principal  residence of up $2 million. The American Taxpayer Relief

Act extends the provision for one year, through 2013.

Mortgage Insurance Premiums-This provision treats mortgage insurance

premiums as deductible interest that is qualified residence interest. The

American Taxpayer Relief Act  extends this provision through December 31,

2013. The provision originally expired after 2011.  This provision provides an

additional itemized deduction by treating mortgage insurance premiums as

deductible qualified residence interest.

Business Tax Provisions

There are some popular but temporary tax extenders relating to businesses

included in the American Taxpayer Relief Act. Among them are Code Sec. 179

small business expensing and bonus depreciation.

Code Sec. 179 Small Business Expensing- The Act extends through 2013

enhanced Code Sec. 179  small business expensing. The Code Sec. 179 dollar

limit for tax years 2012 and 2013 is $500,000 with a $2 million investment limit.

Without the American Taxpayer Relief Act, the Code Sec. 179 dollar dollar limit

for tax years beginning in 2012 would have been $125,000 (subject to  inflation

adjustment) with a $500,000 investment limit (again, subject to inflation

adjustment).

Bonus Depreciation- The Act extends 50 percent bonus depreciation through

2013.  Some transportation and longer period production property is eligible for

50 percent bonus depreciation through 2014.

Bonus depreciation has been used as an economic stimulus in many tax bills in

recent years. One Hundred percent bonus depreciation generally expired at the

end of 2011.

To be eligible for bonus depreciation, qualified property must be “Brand New” or

“First Use”

The information in this article is for general information purposes. This does not

constitute legal, accounting, tax or other professional advice or services and is

presented without any representation or warranty.

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