On December 3, the House of Representative passed a $42 billion package to extend approximately 50 temporary tax breaks that expired December 31, 2013. The one-year extension package would extend the tax breaks through the end of the year permitting taxpayers to take advantage of the breaks on their 2014 returns.
The one-year tax extension bill now makes its way back to the Senate for a vote before the end of the year. Senate Democrats and the White House have indicated support for the one-year extensions package although it differs from the two-year package passed by the Senate last spring.
Included in the one-year extension package: the special rule for contributions of capital gain real property for conservation purposes and the new markets tax credit.
Assuming it becomes law, this package will provide that taxpayers who make a contribution of a conservation easement may take a deduction of up to 50% of the taxpayer’s income and may carryover the unused deduction for up to 15 years.
It will also provide that the new markets tax credit program continues through the end of 2014. Since its inception in 2000, the new markets tax credit program has provided $40 billion to be invested in low-income communities.
Unlike the two-year package proposed by House Ways and Means Committee Chairman Dave Camp (R)(MI), the one-year package passed by the House does not provide any guidance for taxpayers and businesses that want to plan for the future as these breaks expire December 31, 2014.
Taxpayers who benefit from the approximately 50 temporary tax breaks will have to wait for complete tax reform or the tax extenders package next year for more guidance from Congress.