Tax writers have begun negotiating in earnest to extend the 50-plus tax provisions that expired at the end of 2013. Congress isn't expected to address the provisions before adjourning for the November elections, but Senate Finance Committee Chair Ron Wyden, D-Ore., and House Ways and Means Chair Dave Camp, R-Mich., are preparing based on the expectation that the provisions can be addressed in a lame duck session before the end of the year.
The Senate Finance Committee has approved legislation that would retroactively extend 51 of the expired provisions for two years. Important expired provisions include:
- Research credit
- Increased Section 179 expensing limits
- Bonus depreciation
- Subpart F exception for active financing
- Subpart F look-through rule for controlled foreign corporation income
- The reduced five-year holding period for built-in-gains tax after an S corporation conversion
- The S corporation basis reduction limit for charitable gifts
The House has taken a different approach, passing a series of bills that would make just a handful of the provisions permanent. The House is expected to combine several of these bills in a "jobs" package before the election, but that bill isn't expected to advance in the Senate. Instead, Camp, Wyden and other leaders will try to negotiate a compromise after the election.
Camp said last week that he would push to make as many of the provisions permanent as possible. Wyden supports a two-year extension of nearly all of the provisions as a bridge to tax reform, but acknowledged last week that a one-year retroactive extension is on the table. If negotiations fail or if Republicans take control of the Senate and postpone action until the new Congress convenes, the extenders may not be addressed until early 2015.
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