Status of Federal Extender Tax Provisions that Expired at End of 2014

The federal extender tax provisions expired at the end of 2014. Although it appears that Congress will extend these provisions before the end of the year, it is still helpful to reiterate what these provisions are.

Below is a list of the most used of the expired tax provisions and how the Sec. 179 expense provisions would significantly change for Tax Year 2015 if they are extended.

Provisions that need to be extended by Congress to be applicable for Tax Year 2015:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917
• Itemized Deduction for Sales Tax
• 50% Bonus Depreciation
• Exclusion of gain from income for foreclosed home mortgage debt (Form 982)
• 15 year straight line depreciation allowed for qualified leasehold restaurant and retail improvements
• Tax-free distributions from IRAs for charitable purposes
• Nonbusiness energy property tax credit  on Form 5695
• Contributions of capital gain real property made for conservation purposes (50% limitation applies instead of 30% limitation)
• Qualified Real Property category for Sec. 179 expensing purposes

Also, the following limits are in effect for Tax Year 2015 unless Congress extends the expired Section 179 expense provisions:

• Maximum Section 179 Deduction amount: $25,000
• Maximum Cost before Section 179: $200,000

Congress has begun discussions on extending these tax provisions. However, an actual bill will probably not be voted on until sometime this fall. With everything else that Congress needs to take care of this fall, it appears that a bill extending these tax provisions will not be passed until December 2015. Check back here later for more information on what occurs with these provisions and what impact the lateness in the passage of any legislation may have on the start of the 2016 filing season.

For a complete listing of all the expired tax provisions that affect both individuals and businesses, see Things to Know for Current Tax Year section (under Provisions Extended for 2014) of the Tax Resource Center on the CrossLink website.

Federal Tax Provisions Extended for One Year

On December 16, 2014, Congress finished passing legislation that extended, for one year, virtually all of the provisions that had expired at the end of 2013. The bill HR 5771 will become law once the President signs it.

Here is a list of some of the provisions that are now applicable for Tax Year 2014 returns:

• $250 Educator Expense Deduction – Form 1040, line 23
• Tuition and Fees Deduction – Form 8917
• Itemized Deduction for Sales Tax – Schedule A
• 50% Bonus Depreciation
• Exclusion of gain from income for foreclosed home mortgage debt (Form 982)
• Section 179 Deduction:
• Maximum Amount: $200,000
• Maximum Cost: $2,000,000
• Qualified Real property category which includes leasehold improvements, restaurant property and retail property with a maximum deduction of $250,000
• Qualified Real Property
• 15 year straight line depreciation allowed for qualified leasehold restaurant and retail improvements
• Tax-free distributions from IRAs for charitable purposes
• Nonbusiness energy property tax credit on Form 5695
• Contributions of capital gain real property made for conservation purposes (50% limitation applies instead of 30% limitation)

For a complete listing of the individual and business provisions that were extended for 2014 only, as well as changes related to the Affordable Care Act and other reminders, see the Things to Know for the Current Tax Year page on the Crosslink Tax website.