Home
Tax Articles
Tax FAQ
Introducing Our Firm
Our Services
Real Estate Taxletter
Need Help?
Other Websites
Site Map

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
The June 2014 newsletter focusing on tax issues for the homeowner and real estate investor, by certified public accountants in California.
Subscribe to this newsletter!

subscribe
unsubscribe

Michael Gray, CPA's

Real Estate Tax Letter

December 22, 2014

© 2014 by Michael C. Gray
ISSN 1930-0387

A monthly report focusing on tax issues for the homeowner and real estate investor.

President Obama signed the Tax Increase Prevention Act of 2014, (HR 5771) last Friday, December 19.

The legislation extends many tax breaks that expired after 2013 for 2014 only.

Here is a list of some of the major provisions:

Business extenders

  • 50% bonus depreciation for new property.
  • $500,000 limit for Section 179 expense election for depreciable property of small businesses (phases out when more than $2 million of property is purchased.)
  • 15 year depreciable life for qualified leasehold improvements, qualified retail improvements and qualified restaurant property. $250,000 limit for Section 179 expense election for these types of property.
  • Research tax credit.
  • Work opportunity tax credit.
  • 100% exclusion for gain from qualified small business stock for stock acquired during 2014 held more than five years.
  • Five-year recognition period for S corporation built in gains when the S corporation was formerly a C corporation.

Individual extenders

  • State and local sales tax deduction as an alternative to deducting state income taxes.
  • Above the line deduction for qualified post-secondary tuition and fees. (Phases out for joint filers with adjusted gross income (AGI) over $130,000 and singles with AGI over $65,000.)
  • Teachers above the line deduction for up to $250 of unreimbursed out-of-pocket classroom expenses.
  • Exclusion of up to $2 million ($1 million for married, filing a separate return) of cancellation of indebtedness income of qualified principal residence indebtedness.
  • Treatment of mortgage insurance premiums as qualified residential mortgage interest, subject to AGI phaseout.
  • Exclusion of up to $100,000 of distributions from an IRA directly to a charity for taxpayers over age 70 1/2.
  • Exclusion of up to $250 of employer-provided mass-transit benefits (to be the same as employer-provided parking benefits.)
  • Special treatment of charitable contribution of real property for conservation purposes allows contribution to be taken up to 50% of the contribution base.
  • The nonbusiness energy property credit for making qualified energy improvements to residential property.
  • (Note the plug-in electric vehicle credit was NOT extended.)

Achieving a Better Life Experience (ABLE Act)

  • Establishes a tax-favored savings account for individuals with disabilities for tax years beginning after December 31, 2014.

Budget - FY 2015 Omnibus Funding Agreement

  • The budget passes for fiscal year 2015 continues a trend of reducing funding for the Internal Revenue Service. The fiscal year 2015 budget for the IRS is $10.945 billion, which is $346 million less than for fiscal year 2014. Considering the IRS is facing increasing enforcement challenges, including implementing health care reform, and the IRS is responsible for collecting the funds that finance every other government agency, this doesn't seem like a wise decision.

These are only highlights of major changes recently enacted. See your tax advisor for details about how the extender legislation will affect you.

Subscribe to the Real Estate Tax Letter

Did you find this newsletter helpful? If so, subscribe now!

Subscribe to this newsletter!

subscribe
unsubscribe

Return to Table of Contents

Looking for more free real estate tax advice? Visit our real estate investing tax site at Realestateinvestingtax.com.


The October 2014 issue of Michael Gray, CPA's Real Estate Taxletter, focusing on tax issues for the homeowner and real estate investor, by certified public accountants in California.
Michael Gray, CPA
2190 Stokes St. Ste. 102
San Jose, CA 95128
(408) 918-3162
FAX: (408) 998-2766