Eligible small businesses under both the SBJA and the PATH Act include partnerships, sole proprietorships, and non-publicly traded corporations with no more than $50 million in average annual gross receipts over the preceding three tax years.
The primary difference between the SBJA and the PATH Act is that, while the SBJA's AMT exemption applied to all Sec.
The SBJA of 2010 also amended provisions of the Small Business Investment Act of 1958 (SBIA of 1958).
(110) However, as aforementioned, the SBJA of 2010 did temporarily authorize a 504 refinance program that permitted small businesses to refinance property without requiring expansion.
Another suggestion to help return the CDC/504 loan program to its zero-subsidy form is to reinstate the 504 loan refinance program that the SBJA of 2010 temporarily allowed until September 27, 2012.
Prior to SBJA 2010, IRC section 179 property included any tangible property to which IRC section 168 applies, or computer software to which IRC section 167 applies, which is IRC section 1245 property and is acquired by purchase for use in the active conduct of a trade or business.
In addition, SBJA increases the maximum amount that a taxpayer may write off under IRC section 179 and also increases the phase-out threshold amounts for taxable years ending in 2010 or 2011.
EXHIBIT 1 IRC Section 179 Deductions Placed Into Service Dollar Limit of Expense Investment Limit 2008-2009 $ 250,000 $ 800,000 2010-2011 $ 500,000 $2,000,000 2012 $ 125,000 * $ 500,000 * After 2012 $ 25,000 $ 200,000 * Subject to inflation adjustment Under SBJA, the expanded IRC section 179 deduction will end in 2011, and the deduction will return to $25,000; the phase-out amount would have returned to $200,000, beginning in 2012.
Additional First-Year Depreciation: SBJA and TRA Extensions
The SBJA extended the deduction for one more year to include assets purchased in 2010.
IRC section 168(k) makes special allowances for certain property acquired before January 1, 2013, and SBJA expands this provision to include qualified property acquired by the taxpayer pursuant to a written binding contract (IRC section 168[k][A][iii][II]).
Practitioners with S corporation, REIT, or RIC clients should pay close attention to the possible relief from the BIG tax offered by the SBJA
. A full analysis of the facts and dates--especially for those taxpayers that are outside the five-year recognition period in 2011--must be performed to determine whether the relief applies, but the provisions could afford those clients extra help in their strategies to deal with continued economic uncertainty.