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Real Estate E-News December 2013

This newsletter is published by RubinBrown’s Real Estate Services Group to inform our clients and contacts about relevant industry updates, legislation and accounting information.

Senator Baucus Proposes Changes To Clean Energy Tax Incentives

Senate Finance Chairman Max Baucus presented a proposal to reform and/or eliminate certain tax breaks that promote clean energy and efficiency.

Savings from these cuts would be used to assist in financing a reduced corporate tax rate. To read the full extent of the proposal, please click here.

Missouri Governor Nixon Continues To Urge Tax Credit Reform

Upon signing the job creation tax credit expansion into law, Nixon expressed his interest in focusing on credit programs with “economic return” to the state but did not indicate intentions for the low income and historic tax credit programs.

To read the full article, please click here.

Year End Reminders And Pending Expirations

The 50% bonus depreciation benefit on properties with lives of 20 years or less is set to expire at the end of 2013. No measures have yet been taken to extend the additional depreciation into future years.

The flat 9% low income credit is set to expire for projects not receiving an allocation of credits by January 1, 2014. Allocations received after this date revert to the floating rate.

Several individual tax changes are in place for 2013:

  • Tax rate/bracket changes for taxable income over certain thresholds has increased to 39.6% as the top tax rate (over $400,000 for single filer and $450,000 for married filing jointly)
  • Capital gains and dividend tax rates increase from 15% to 20% for taxable income over certain thresholds (over $400,000 for single filer and $450,000 for married filing jointly)
  • Itemized deduction phaseout of 3% is revived for taxpayers with adjusted gross income over a certain threshold (over $250,000 for single filer and $300,000 for married filing jointly)
  • Personal exemption phaseout of 2% for each $2,500 over a certain adjusted gross income threshold also returns (over $250,000 for single filer and $300,000 for married filing jointly)
  • Medical expense deduction threshold is increased to 10% of adjusted gross income versus 7.5% in previous years for taxpayers under age 65
  • New Affordable Health Care Law taxes come into play, including the 0.9% additional Medicare Tax and the 3.8% surtax on net investment income

The due date of fourth quarter tax estimated payments for those taxpayers for calendar year ends is January 15, 2014.

FASB Ratifies New Accounting For Affordable Housing Investments

The Financial Accounting Standards Board has approved the proposed changes in accounting for investments in affordable housing projects.

The effective date of the change is for years beginning after December 15, 2014, but early implementation is allowed. For details on the accounting changes, please click here.

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