On February 13, the House passed a $77 billion bill 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 only immediately deduct $25,000 in investment costs in 2015.
This legislation now moves to the Senate and represents the first step in what is likely to be a long process to once again renew dozens of tax provisions that Congress extended last December through 2014. Several of these so-called tax extenders benefit the multifamily industry, including bonus depreciation, the flat 9 percent Low-Income Housing Tax Credit, incentives for energy-efficiency and the New Markets Tax Credit.
However, the Obama Administration opposes enacting permanent small business legislation that does
not include a revenue offset. So lawmakers may resort to their usual pattern of
waiting until later this year to send the White House a package that addresses
expired tax provisions for a period of just one or two years.
NMHC/NAA joined with a coalition of trade associations in a letter voicing support for the small business expensing bill and will continue to push for its enactment.
- Bipartisan Multifamily Depreciation Bill Introduced
- IRS Delays Implementation of New Partnership Tax Forms
- Real Estate Industry Multifamily Depreciation Parity Act Letter to House and Senate – December 2019
- Real Estate Group Letter to IRS Regarding New Partnership Tax Forms – November 2019
- Real Estate Industry Urges Congress to Correct Depreciation Oversight in Tax Cuts and Jobs Act Legislation