Lawmakers cleared a three-month extension, through October 29, of highway spending. The bill includes several tax compliance offsets that modify tax return filing dates for multifamily partnerships and estate tax reporting requirements. The short-term extension will give House Ways and Means Committee Chairman Paul Ryan (R-WI) an opportunity to draft a longer-term highway bill. The goal is to draft a bill that generates revenues by overhauling the nation’s international tax laws.
However, this short-term highway bill does not include an extension of over 50 expired tax provisions. These tax provisions include incentives to make investments in multifamily properties, support affordable housing and promote energy-efficiency. The so-called tax extenders are likely to be enacted after the August recess. This may be done as part of a year-end package addressing the debt ceiling and appropriations. But if Chairman Ryan sees success in international tax reform, then extenders could also move as part of that legislation.
Highway Bill: Tax Compliance Provisions
The tax compliance provisions in the highway bill would require partnerships to file tax returns by March 15 - or two and a half months after the close of its tax year. And C corporations would be required to file tax returns by April 15 - or three and a half months after the close of its tax year. Under current law, partnerships are required to file tax returns by April 15 while C corporations must file by March 15.
Another revenue offset in the highway bill would mandate that estates report the value of property transferred to decedents and the Internal Revenue Service. This would prevent decedents from inflating their basis in inherited property and, thereby, reducing their tax liabilities when they sell acquired assets.
As noted above, the annual debate and process to extend a number of temporary tax provisions of interest to apartment firms is yet again underway. On July 21, the Senate Finance Committee voted 23-3 to renew these tax extenders. As we reported, there are numerous tax extenders that would impact multifamily.
It’s uncertain what legislative vehicle will ultimately carry the extenders to the White House this fall. In addition, it remains to be seen if Congress will agree to make several of them permanent.
- Stepped-Up Basis and Taxation of Unrealized Capital Gains Fact Sheet
- Estate Tax
- Trade Group Coalition Letter to House Ways and Means Committee Opposing Proposed Tax Increases
- Family Business Estate Tax Coalition Letter Expressing Support for Stepped-Up Basis
- Family Business Estate Tax Coalition Letter in Support of Thune Amendment 3106