On Dec. 16, 2014, Congress passed the “Tax Increase Prevention Act of 2014”, which the President is expected to sign into law.
The Tax Increase Prevention Act extends through 2014 a host of depreciation and expensing provisions for businesses that had expired at the end of 2013, including generous Code Sec. 179 expensing and phase-out limits; 15-year write-off for qualifying leasehold improvements, restaurant buildings and improvements, and retail improvements; and 50% bonus first-year depreciation.
The Tax Increase Prevention Act extends 50% first-year bonus depreciation for one year so that it applies to qualified property acquired and placed in service before Jan. 1, 2015.
The Tax Increase Prevention Act also retroactively extends for one year the increased $500,000.00 maximum expensing amount under Code Sec. 179 and the increased $2 million investment-based phase-out amount. These increased amounts will apply for qualified property placed in service before Jan. 1, 2015.
For tax years beginning after 2014, the maximum expensing amount is again scheduled to drop to $25,000 and the investment-based phase-out amount is scheduled to drop to $200,000.