On June 12, the House continued efforts to renew expired tax provisions by passing legislation(H.R. 4457) that allows small businesses, including multifamily firms, to permanently write off up to $500,000 in qualifying investments in the year of purchase. This expensing limit would be phased down if overall investment costs exceed $2 million - ultimately, limiting the proposal to smaller multifamily operators.
Without legislation, small businesses can in 2014 immediately deduct only $25,000 in investment costs in 2014. To bolster the ability of qualifying multifamily firms to make investments, NMHC/NAA joined numerous stakeholders in a June 9 letter to bill sponsors Representatives Pat Tiberi, R-Ohio, and Ron Kind, D-Wis., to express support for the measure.
Legislation to address the investment needs of larger multifamily firms is also on the House’s agenda. Specifically, the House Ways and Means Committee approved legislation (H.R. 4718) on May 29 to make permanent so-called bonus depreciation. The measure allows firms, including multifamily operators, to immediately deduct 50 percent of new equipment purchases as opposed to having to depreciate the entire expense over a period of years.
While the House is moving tax extenders on a piecemeal basis, the Senate remains stalled in a clash over which amendments may be offered to the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act (S. 2260) that is focused on renewing expired tax provisions for two years through 2015. Currently, few expect the Senate to pass the EXPIRE Act in the near-term, though there remains optimism the chamber will eventually take action.
The outlook for tax extenders is also complicated by a division between the House and Senate over whether expiring tax provisions should be extended permanently, instead of on a short-term basis. Unfortunately, this disagreement is likely to delay final legislation until after the November elections regardless of whether the House and Senate are able to pass their own versions of legislation.
- Real Estate Coalition Letter on ADS Tax Reform
- Real Estate Industry Continues to Press for 30-Year Depreciation Period for Multifamily Buildings
- End-Of-Year House Tax Bill Includes Beneficial Provision But Lacks Depreciation Fix
- House Votes to Make Permanent Tax Cuts for Pass-Through Businesses
- Top Lawmakers Meet with NMHC Members at 2018 Fall Meeting