Tax Return Tips - Tax Increase Prevention Act of 2014

Congress a short time ago enacted "Tax Increase Prevention Act of 2014," and extended a various tax law provisions known as "extenders." The legislation extended or expiring tax breaks that affect individuals, businesses, and energy purchases.
POMPANO BEACH, Fla. - April 1, 2015 - PRLog -- The extenders are a mixed assortment of 50 individual and business tax deductions, tax credits, and other laws which have been on the books for years but which technically were set to expire. Legislators repeatedly renew tax breaks for short periods of time, that is why they are called "extenders." The 2014 Act extends some tax breaks, most of which expired at the end of 2013.

This is a synopsis  of the key tax breaks that were extended by the new law. Please call our office or visit CPA Firm South Florida ( for more information and details of how the law may affect your tax situation. Individual extenders

The following provisions which affect individual taxpayers are extended through 2014:

... the $250 above-the-line deduction for teachers and other school professionals for expenses paid or incurred for books, certain supplies, equipment, and supplementary material used by the educator in the classroom;

... the exclusion of up to $2 million ($1 million if married filing separately) of discharged principal residence indebtedness from gross income;

... parity for the exclusions for employer-provided mass transit and parking benefits;

... the deduction for mortgage insurance premiums deductible as qualified residence interest;

... the option to take an itemized deduction for State and local general sales taxes instead of the itemized deduction permitted for State and local income taxes;

... the increased contribution limits and carryforward period for contributions of appreciated real property (including partial interests in real property) for conservation purposes;

... the above-the-line deduction for qualified tuition and related expenses; and

... the provision that permits tax-free distributions to charity from an individual retirement account (IRA) of up to $100,000 per taxpayer per tax year, by taxpayers age 701/2 or older.

Business extenders

The following business credits and special rules are generally extended through 2014:

... the research credit;

... the temporary minimum low-income housing tax credit rate for nonfederally subsidized new buildings;

... the military housing allowance exclusion for determining whether a tenant in certain counties is low-income;

... the Indian employment tax credit;

... the new markets tax credit;

... the railroad track maintenance credit;

... the mine rescue team training credit;

... the employer wage credit for activated military reservists;

... the work opportunity tax credit;

... qualified zone academy bonds;

... three-year depreciation for racehorses;

... 15-year straight line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements;

... 7-year recovery period for motorsports entertainment complexes;

... accelerated depreciation for business property on an Indian reservation;

... 50% bonus depreciation (extended before Jan. 1, 2016 for certain longer-lived and transportation assets);

... the election to accelerate alternative minimum tax (AMT) credits in lieu of additional first-year depreciation;

... the enhanced charitable deduction for contributions of food inventory;

... increase in expensing (up to $500,000 write-off of capital expenditures subject to a gradual reduction once capital expenditures exceed $2,000,000) and expanded definition of property eligible for expensing;

... the election to expense mine safety equipment;

... special expensing rules for certain film and television productions;

... the deduction allowable with respect to income attributable to domestic production activities in Puerto Rico;

... the exclusion from a tax-exempt organization's unrelated business taxable income (UBTI) of interest, rent, royalties, and annuities paid to it from a controlled entity;

... the special treatment of certain dividends of regulated investment companies (RICs);

... the definition of RICs as qualified investment entities under the Foreign Investment in Real Property Tax Act;

... exceptions under subpart F for active financing income;

... look-through treatment for payments between related controlled foreign corporations (CFCs) under the foreign personal holding company rules;

... the exclusion of 100% of gain on certain small business stock;

... the basis adjustment to stock of S corporations making charitable contributions of property;

... the reduction in S corporation recognition period for built-in gains tax;

... the empowerment zone tax incentives;

... the temporary increase in limit on cover over rum excise taxes to Puerto Rico and the Virgin Islands;

... the American Samoa economic development credit; and

... two provisions dealing with multiemployer defined benefit pension plans (dealing with an automatic extension of amortization periods and shortfall funding method and endangered and critical rules), extended through 2015.

Energy-related extenders

... the credit for nonbusiness energy property;

... the second generation biofuel producer credit (formerly cellulosic biofuel producer tax credit);

... the incentives for biodiesel and renewable diesel;

... the Indian country coal production tax credit;

... the renewable electricity production credit, and the election to claim the energy credit in lieu of the renewable electricity production credit;

... the credit for construction of energy efficient new homes;

... second generation biofuel bonus depreciation;

... the energy efficient commercial buildings deduction;

... the special rule for sale or disposition to implement federal energy regulatory commission (FERC) or State electric restructuring policy for qualified electric utilities;

... the incentives for alternative fuel and alternative fuel mixtures; and

... the alternative fuel vehicle refueling property credit.

We hope this information is helpful. Would like more details about these changes or any other aspect of the new law? Call or write us.

Very truly yours,

Peter Rudolph, CPA

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Peter Rudolph CPA
CPA Firm South Florida News
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