On Feb. 13, the House approved legislation to permanently increase Sec. 179 expensing levels, a top priority for AED, 272-142.
Under current law, beginning in 2015, a taxpayer may immediately expense up to $25,000 of Sec. 179 property annually, with a dollar for dollar phase-out of the maximum deductible amount for purchases in excess of $200,000. The America’s Small Business Tax Relief Act of 2015 (H.R. 636)permanently increases the maximum amount and phase-out threshold to the levels in effect in 2010 through 2014 ($500,000 and $2 million respectively) and allow for inflation adjustments.
H.R. 636 also contains two measures specifically related to S corporations. The legislation makes permanent both the five-year built-in gains holding period (originally introduced as H.R. 629) and a basis adjustment (rather than fair market value) to ensure S corporations are able to deduct the full value of the stock they donate to charity (originally introduced as H.R. 630).
AED strongly supports permanently increasing Sec. 179 expensing levels to promote growth and add certainty to the tax code. The association has made increased expensing a top tax reform priority and commends bill sponsor Rep. Pat Tiberi (R-Ohio) and the legislation’s supporters for their leadership on the issue. As Senate Finance Committee Chairman Orin Hatch (R-Utah) attempts to enact comprehensive tax reform, H.R. 636 and other proposals altering specific parts of the tax code will likely sit on the backburner in the upper chamber. However, AED and its allies will continue to fight for capital investment incentives important to the construction equipment industry.
To urge your lawmakers to reinstate bonus depreciation for 2015 and permanently increase Sec. 179 expensing levels visit AEDaction.org.