Many Tax Extenders Made Permanent

The Consolidated Appropriations Act of 2016 (H.R. 2029), which includes the “Protecting Americans from Tax Hikes (PATH) Act of 2015″ was enacted on 12/18/15. The PATH Act makes permanent many of the long-favored individual and business extenders, including, among other provisions, an enhanced child tax credit and earned income tax credit, the state and local general sales tax deduction, the ability to make tax-free distributions from IRAs for charitable purposes, the research and development credit, the enhanced Section 179 deduction, the 100% gain exclusion on certain small business stock, and the accelerated period for S-corporation’s recognition of built-in gains tax. Certain provisions were modified and extended through 2019, such as bonus depreciation and the work opportunity credit, while others were extended only for two years (through 2016), such as the inclusion of qualified mortgage insurance premiums in the mortgage interest deduction and the above-the-line deduction or qualified tuition and related expenses. Other provisions in the PATH Act include, among other issues, Real Estate Investment Trusts (REITs), IRS administration, and a taxpayer’s access to the U.S. Tax Court.

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