The Senate Finance Committee has released information on a bill to extend almost all of the tax breaks that ended on December 31, 2013. The “Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act” is a bipartisan extension package which has been highly anticipated by the business community. All provisions have been extended retroactively back to January 1, 2014 and are going to be extended for two tax years, 2014 and 2015 (unless otherwise noted).
The more significant provisions are as follows:
1. Research and experimentation credit (Code Sec. 41)
2. New markets tax credit (Code Sec. 45D)
3. Seven-year recovery period for motorsports entertainment complexes (Code Sec. 168)
4. Energy efficient commercial buildings deduction (Code Sec. 179D) with:
(1) modifications to permit allocation of the deduction to the person responsible for the design of the property by tribal governments and non-profits, in the same manner as is allowed for public property; and (2) increased efficiency standards
5. 15-year straight line cost recovery for qualified leasehold, restaurant, and retail improvements (Code Sec. 168(e)(3)(E)) (This includes up to $250,000 of this property allowed as a Sec. 179 deduction)
6. Accelerated depreciation for business property on Indian reservations (Code Sec. 168(j))
7. Enhanced charitable deduction for contributions of food inventory (Code Sec. 170)
8. 50% bonus depreciation (extended to a placed in service date before Jan. 1, 2017 for certain long production period property and transportation assets) (Code Sec. 168(k))
9. Election to accelerate Alternative Minimum Tax (AMT) credits in lieu of additional first-year depreciation (Code Sec. 168(k))
10. Increase in expensing to $500,000/$2,000,000 in 2014 (note that this is only for 2014), and expanded definition of Section 179 property (See note in number 5 above) (Code Sec. 179)
11. Incentives for biodiesel and renewable diesel (Code Sec. 40A, Code Sec. 6426)
12. Credit for construction of new energy efficient homes (Code Sec. 45L)
Please contact Bedford Cost Segregation at 1.800.257.8962 for questions regarding how your business can benefit from these provisions.