American Taxpayer Relief Act of 2012: Business & Investment Incentives

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Samir B. Dahman

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  • Free initial consultation, Credit cards accepted, Fixed hourly rates

Member at firm Samir Dahman, Esq.

Serving Columbus, OH

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On January 1, 2013,
Congress passed the American Taxpayer Relief Act of 2012, which President Obama
recently signed into law.  The Act
extends a number of business and investment incentives. Significant items
include:

  • Two-year extension of the
    research tax credit (through 2013).
  • Two-year extension of the new
    markets tax credit program (through 2013). Unused new markets tax credits
    may be carried over until 2018.
  • Two-year extension of the
    empowerment zone tax incentives for certain economically depressed census
    tracts and the tax incentives for issuing New York Liberty Zone bonds
    (through 2013).
  • Two-year extension of the 15-year
    straight-line amortization for qualified leasehold improvements, qualified
    restaurant property and qualified retail improvements (through 2013), to
    apply to property placed in service on or before December 31, 2013.
  • One-year extension of 50 percent
    bonus depreciation for new qualified property placed in service before
    January 1, 2014 (and before January 1, 2015 for certain long-lived and
    transportation property), and a one-year extension to allow taxpayers to
    elect to accelerate some alternative minimum tax credits in lieu of bonus
    depreciation (through 2013).
  • Two-year extension of the 2011
    Section 179 expense amount and phase-out limitations so that for tax years
    2012 and 2013, the Section 179 expense amount is increased to $500,000,
    reduced on a dollar-for-dollar basis to the extent that the cost of
    qualifying property exceeds $2 million. For taxable years beginning in
    2014 and later, the maximum expensing amount is $25,000 and the phase-out
    limitation is $200,000.
  • Two-year extension of temporary
    100 percent capital gains exclusion for individuals who sell "qualified
    small business stock" (through 2013).
  • Two-year extension of the
    five-year holding period for S corporation built-in gains tax for sales of
    S corporation stock occurring in 2012 and 2013.
  • Two-year extension of the work
    opportunity tax credit (through 2013).
  • Two-year extension of the Section
    956(c)(6) look-through rule for dividends, rental and royalties received
    by a controlled foreign corporation from a related controlled foreign
    corporation for two years (through 2013).
  • Two-year extension of Subpart F
    exemption for active-financing income (through 2013).
  • Two-year extension of the
    inclusion of a regulated investment company within the definition of a
    "qualified investment entity" for purposes of the FIRPTA rules
    (through 2013).
  • Two-year extension of enhanced
    charitable deductions for contributions of food inventories to designated
    institutions (through 2013).
  • Two-year extension of the
    exception to unrelated business taxable income regarding payments of rent,
    royalties, annuities or interest income by a controlled organization to
    its tax-exempt controlling parent pursuant to a binding written contract
    in effect on August 17, 2006 (through 2013).
  • Two-year extension of rules
    relating to "interest-related dividends" and "short-term
    capital gain dividends" received by regulated investment companies
    (through 2013).
  • The Act also extends certain
    energy-related provisions, including:
  • One-year extension of the
    renewable electricity property wind production tax credit to apply to a
    facility placed in service, or for which construction begins, before
    January 1, 2014. Further modifies Section 45 to allow renewable energy
    facilities for which construction begins by December 31, 2013 to qualify
    for the production tax credit. Extends taxpayer’s right to elect the 30 percent
    investment tax credit in lieu of the production tax credit for renewable
    energy facilities for which construction begins by December 31, 2013.
  • Two-year extension of the $1 per
    gallon tax credit for biodiesel, the 10 cents per gallon small
    agri-biodiesel producer tax credit and the $1 per gallon tax credit for
    diesel fuel created from biomass (through 2013).
  • Two-year extension of the tax
    credit for certain energy-efficient improvements to residential homes
    (through 2013).
  • Two-year extension of the new energy-efficient
    home credit to qualifying homes purchased before January 1, 2014, and of
    the tax credit for energy efficient dishwashers, clothes washers and
    refrigerators (through 2013).

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Business and investment incentives of the American Taxpayer Relief Act of 2012.

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