Today, the President signed into law the Tax Increase Prevention Act of 2014 (“the extenders bill”), which retroactively extends for one year (through 2014) most but not all of the “tax extenders” that had expired after 2013.
The key provisions that were extended through December 31, 2014 include:
- 50% bonus depreciation on new business assets placed in service before January 1, 2015;
- Enhanced Section 179 expensing of up to $500,000 of business assets placed in service before January 1, 2015 (with a $2 million phaseout threshold);
- 15-year straight-line depreciation for qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property placed in service before January 1, 2015;
- 100% exclusion for gain on Qualified Small Business Stock (QSBS) acquired after September 27, 2010 and before January 1, 2015, and held for more than five years;
- Exclusion for up to $100,000 of distributions from individual retirement accounts by individuals age 70-1/2 and older for charitable purposes; and
- Exclusion for discharged mortgage debt on a principal residence of up to $2 million.
This bill also includes the Achieving a Better Life Experience (ABLE) Act, which allows individuals and families to establish and make nondeductible contributions to a tax-free savings account for the benefit of certain individuals with disabilities occurring before they attained the age of 26. Distributions are tax-free to the extent they are used to cover qualified disability expenses such as health care, housing, transportation, and lifelong education (similar to 529 plans for college expenses).
As always, please call us if you have any questions or if we can assist you with any matters.
Any tax advice in this communication is not intended or written by Navolio & Tallman LLP to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer, or (ii) promoting, marketing, or recommending to another party any matters addressed herein. With this newsletter, Navolio & Tallman LLP is not rendering any specific advice to the reader.