written by Jay Logal

Congress has passed and the President has now signed the Tax Increase Prevention Act of 2014. Listed below are the much awaited tax extenders.

Bonus first year depreciation
This generally allows an additional first year depreciation deduction equal to 50% of the adjusted basis of qualified new property acquired and placed in service after December 31, 2011 and before January 1, 2015. This includes the rule treating qualified leasehold improvement property as 15 year property making it eligible for the bonus depreciation.

First year depreciation cap for autos and trucks
The luxury auto first year depreciation dollar limit is increased by $8,000. The placed in service deadline for qualified property is December 31, 2014.

Code sec. 179
Extends the $500,000 expensing amount and $2,000,000 investment based phase out amounts.

The following are business related items that have been extended through 2014:

  • Research Credit
  • Work Opportunity Tax Credit
  • Indian Employment Credit
  • New Markets Tax Credit
  • Differential Wage Payment Credit
  • Enhanced Deduction for Food Inventory
  • Reduction in S Corp Recognition Period for Built-In Gains Tax
  • Exclusion of 100% of Gain on Certain Small Business Stock
  • Lower Shareholder Basis Adjustments for Charitable Contributions by S Corporations
  • Special Rule for Payments to a Charity from a Controlled Entity

The following are individual tax breaks that have been extended through 2014:

  • Above the Line Deduction for Educator Expenses
  • Exclusion for Discharged Home Mortgage Debt
  • Increase in Excludible Employer Provided Mass Transit and Parking Benefits
  • Mortgage Insurance Premiums as Deductible Qualified Residence Interest
  • State and Local Sales Tax Deduction
  • Above the Line Deductions for Higher Education Expenses
  • Nontaxable IRA Transfers to Eligible Charities

The Whitlock Company is dedicated to providing up to date information so we can work together planning and structuring business transactions in the ever changing world of taxation. Time is running out in 2014 to make adjustments. If you have any questions about these items or your tax position in general, contact us immediately 417-881-0145.