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Focus on Construction: Summary of the American Taxpayer Relief Act for the Construction Industry

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On January 1st, 2013 Congress passed the American Taxpayer Relief Act. Below is a summary prepared by RubinBrown's Construction Services Group to highlight many of the implications to the Construction Industry.
January 16, 2013

On January 1st, 2013 Congress passed the American Taxpayer Relief Act. Below is a summary prepared by RubinBrown's Construction Services Group to highlight many of the implications to the Construction Industry.

Depreciation Provisions

The deduction for 50% bonus depreciation was extended for new property placed in service after December 31st, 2012 and before January 1st, 2014.

The election to expense depreciable property under Section 179 was expanded for years beginning in 2012 and 2013 to $500,000. Along with this the Section 179 investment limitation phase-out was increased to $2 million for 2012 and 2013. This expense election remains subject to the taxable income limitation. The act also extended the treatment of up to $250,000 of the cost of qualified real property as section 179 property for years beginning in 2012 and 2013.

The election to accelerate the AMT and research credits instead of electing bonus depreciation has also been extended through 2013.

S-Corporations

The act extended the shortened 5 year S-Corporation recognition built-in-gains tax period for 2012 and 2013.

Tax Credits

The Research and Development Credit, Work Opportunity Credit and various empowerment zone tax incentives were extended for 2012 and 2013. The credit for energy-efficient new homes was extended through 2013. Various other energy credits were also extended for 2012 and 2013.

The domestic production activities deduction for qualifying activities in Puerto Rico was also extended for 2012 and 2013.

 

Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.

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