Possibilities Insights for Businesses & Individuals - Retirement Planning: It’s Really About Cash Flow – October 2015

Eide Bailly

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4310 17th Ave S PO Box 2545 Fargo ND 58108-2545 This publication is produced and published by Eide Bailly and distributed with the understanding that the information contained does not constitute legal, accounting or other professional advice. It is not intended to be responsive to any individual situation or concerns as the contents of the publication are intended for general informational purposes only. Readers are urged not to act upon the information contained in this publication without first consulting competent legal, accounting or other professional advice regarding implications of a particular factual situation. Questions and information for publication can be submitted to your Eide Bailly representative. To request reprints of this publication, send a written request to RequestReprints@eidebailly.com. © 2015 Eide Bailly LLP. To view this and previous issues of POSSIBILITIES, visit www.eidebailly.com/publications Managing Editor: Liz Stabenow Assistant Editor: Clinton Larson Send comments to: possibilities@eidebailly.com An Independent Member Firm of HLB International Resurrecting Depreciation Provisions The higher deduction levels of Section 179, along with the bonus depreciation provision, expired December 31, 2014, as did approximately 60 other tax extender provisions. While tax legislation can be challenging to predict, recent events have given us some glimmer of hope that the lapsed depreciation provisions will be resurrected and even improved. Legislative Movement The House of Representatives passed a bill in February 2015 to make the lapsed Section 179 provisions permanent, including indexing the $500,000 maximum allowance and the $2 million phase-out threshold for inflation starting in 2016. More recently, two new pieces of legislation have been introduced in the House.

One increases bonus depreciation from 50 percent to 100 percent, and both make bonus depreciation permanent, mirroring legislation passed in the House during the last Congressional session but failing to get Senate attention. In June, the Senate Finance Committee broached the topic of tax extenders and decided to extend 52 lapsed tax provisions, generally with a two-year extension through 2016 and retroactive application back to January 1, 2015. Items included were the extension of 50 percent bonus depreciation; extension www.eidebailly.com of the expensing limit of eligible Section 179 property to $500,000, as well as investment-based phase-out amount to $2 million and an expanded definition of what qualifies as Section 179 eligible property; an election to accelerate AMT credits in lieu of additional first-year depreciation; continued allowance of accelerated depreciation for business property on an American Indian reservation; and the 15-year recovery periods for qualified leasehold improvement property, qualified retail improvement property and qualified restaurant property. Decision Could Come Soon Although the lapsed depreciation provisions seem likely to be extended again, permanency of bonus and Section 179 provisions are still in question and will await full Congressional action, anticipated this fall. Hopefully, this will save taxpayers and the IRS from the recent tradition of tax extender passage agony in the final week of December, if not later. C O N TA C T Julie Helms Cost Segregation Senior Manager 612.253.6511 jhelms@eidebailly.com .