President Obama signed H.R. 5771, The Tax Increase Prevention Act (TIPA) on December 19th.  This was a one-year extension of over 50 tax laws that expired on December 31, 2013.

Individual Income Tax provisions which have been extended include:

  • the above-the-line tax deduction of expenses of elementary and secondary school teachers of up to $250;
  • the tax exclusion of imputed income from the discharge of indebtedness for a principal residence of up to $2 Million;
  • the tax deduction of mortgage insurance premiums;
  • the tax deduction of state and local general sales taxes in lieu of state and local income taxes;
  • the tax deduction of contributions of real property interests for conservation purposes;
  • the tax deduction of qualified tuition and related expenses;
  • the tax exemption of distributions from individual retirement accounts for charitable purposes
  • the tax credit for residential energy efficiency improvements;

Business related tax provisions which have been extended include:

  • the tax credit for increasing research activities;
  • the work opportunity tax credit;
  •  accelerated depreciation of qualified leasehold improvement, restaurant, and retail improvement property;
  • 50% first-year bonus depreciation for one year so that it applies to qualified property acquired and placed in service before January 1, 2015;
  • Increased $500,000 maximum expensing amount under IRC Sec. 179 and the increased $2 million investment-based phaseout amount.
  • the 100% exclusion from gross income of gain from the sale of small business stock;
  • the reduction of the recognition period for the built-in gains of S corporations to 5 years;
  • tax incentives for investment in empowerment zones;

All of the tax provisions retroactively extended under TIPA expire again as of December 31, 2014.

Please contact us with questions.