Ways and Means Committee Approves Six Business Tax Extenders

Saro Sevugan, CPA at UHY Advisors MI, Inc. discusses how the House Ways and Means Committee agreed to make permanent six tax provisions that expired in December 2013.

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Sterling Heights, MI (PRWEB) May 06, 2014

On April 29th, the House Ways and Means Committee agreed to make permanent six tax provisions that expired in December 2013. The bill still would need to be passed by the full House, Senate and signed by the President to become law.

The six permanent tax benefits in this bill include:

  •     §179 expensing: The enhanced Section 179 measure would maintain the expensing level at $500,000 that existed before extenders expired in December 2013.
  •     Research credit: This credit, which is commonly referred to as the research and development or R&D credit, would include an increased alternative simplified credit of 20 percent (up from 14 percent) and would be available to taxpayers who file amended tax returns.
  •     Basis reduction rule for S corporations making charitable contributions of property: This provision provides that the amount of a shareholder’s basis reduction in the stock of an S corporation by reason of a charitable contribution made by the corporation will be equal to the shareholder’s pro rata share of the adjusted basis of the contributed property.
  •     The five-year recognition period for built-in gains of S corporations: If an S corporation that was previously taxed as a C corporation has built-in gains attributable to the period during which it was a C corporation, it is subject to a corporate level tax (the built-in gains or BIG tax) when it recognizes the built-in gains within five years after its conversion to S corporation status.
  •     Active financing exemption for lenders under subpart F of the code: The active financing exception makes exceptions for foreign personal holding company income. For Section 954(h) to apply, a controlled foreign corporation must be “eligible,” which means it must be predominantly engaged in the active conduct of banking, financing or a similar business and must conduct substantial activity with respect to this business, as per IRC Section 954(h)(2)(A).
  •     Look-through treatment of payments between related controlled foreign corporations under the foreign personal holding company rules (sec. 954(c)(6)): Certain payments of dividends, interest, rents and royalties that would otherwise be included in foreign personal holding company income may be excepted if the payments are received from a related controlled foreign corporation and are properly attributable and allocable to income of the payor that is neither subpart F income nor treated as effectively connected to a US trade or business.

For more information or questions on this topic, please contact your professional at UHY LLP in Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040 or visit us on the web at http://www.uhy-us.com.

About UHY Advisors
UHY Advisors, operating in an alternative practice structure with UHY LLP, forms one of the largest professional services firms in the US. While that scale might provide confidence for some clients, others tell us our greatest value is the way we bring these resources to bear to help address today’s evolving business challenges. It’s a philosophy we call “The Next Level of Service”. To learn more visit http://www.uhy-us.com.

UHY Advisors provides tax and consulting services to a variety of sectors. UHY LLP, a licensed CPA firm, provides audit and other attest services to public and private companies. UHY Advisors FLVS provides forensic, valuation, intellectual property, electronic discovery and international arbitration services to law firms and their clients. Many of these services grew from client business needs and their requests for assistance in a variety of areas of expertise.

All of the above entities are members of UHY International, a global network of independent professional services firms that provide audit, tax and consulting services around the world. UHY International member firms comprise one of the top international accounting networks in the world. As a member firm, we provide our clients with resources in business centers strategically located around the globe. We are an active member in this organization with significant participation that brings the power of an international network to bear for our clients.

UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY LLP and UHY Advisors, Inc. are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.


Contact

  • Jessica Dalessandro
    UHY LLP
    +1 (586) 843-2507
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