On December 16, the House of Representatives recessed and will not return to Washington until January 12, 2010. The House had passed a number of tax bills, including legislation to extend expiring provisions, but efforts were stalled and expiring provisions thus will not be extended until sometime in 2010. These provisions include: extension of the R&D tax credit; extension of the 15-year straight-line recovery of leasehold improvements; and the Subpart F rules relating to active financing income and look-through treatment of payments between related CFCs. Tax increases which might be enacted to pay for these initiatives will include: carried interest; tax haven reporting; and black liquor changes. Additionally, the estate tax and the generation skipping tax will expire at the end of 2009, and legislators have expressed intent to reinstate the taxes retroactively. Finally, completion of health care legislation is now impossible before 2010 and will have later effective dates if enacted. This legislation includes: special industry fees; additional W-2 reporting; and changes to flexible spending account rules. Congress will return in January to a long list of early action items. It is expected that action on health care reform will take priority. The lapse of the estate tax also brings with it a repeal of the step-up in basis at death, which is expected to be retroactively reinstated, given that the alternative, carryover basis, has been repealed twice before.