House Ways and Means Committee votes to make six expired provisions permanent

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The House Ways and Means Committee passed a series of bills last week that would permanently extend six of the 50-plus tax provisions that expired at the end of 2014. The votes represent the first step toward addressing the expired provisions this year and closely follow the process the Ways and Means Committee used last year.

The six bills passed by the committee would make permanent the following provisions:

  • Increased Section 179 expensing limits (H.R. 636)
  • The reduced five-year holding period for built-in-gains tax after an S corporation conversion (H.R. 629)
  • The S corporation basis reduction limit for charitable gifts (H.R. 630)
  • Increased percentage limits and extended carryforward periods for charitable contributions of conservation easements and capital gain property (H.R 641)
  • Tax-free individual retirement account distributions for taxpayers age at least 70½ (H.R. 637)
  • Enhanced charitable deduction for contributions of food inventory (H.R. 644)

In addition, H.R. 636 would remove the Section 179 limitations on real property and heating and air-conditioning property, and H.R. 641 would expand favorable conservation easement treatment to Alaska Native Corporations. The House Ways and Means Committee also approved a seventh bill (H.R. 640) that would cut the 2% excise tax rate on private foundation investment income to 1%.

All the provisions that passed last week were among the 10 expired provisions that the House Ways and Means Committee voted to make permanent last year. The committee appears to be repeating the process it used in 2014, after the extender provisions expired at the end of 2013. Last year, the House voted to make many of the provisions permanent before trying to negotiate a compromise with the Democratic Senate that would have extended most of the provisions for two years and made a handful permanent. When the proposed compromise fell through after a veto threat, lawmakers settled on just a one-year retroactive extension of the expired provisions for 2014.

The House Ways and Means Committee is now restarting the effort. Committee Chair Paul Ryan, R-Wis., pledged to mark up more permanent extender bills in the future, and the House is likely to vote on at least some of the bills.

Ryan may get a better reception in compromise talks with the Senate now that it is controlled by Republicans, but he will still need to negotiate with the president. The six bills were approved by party line votes last week. While Democrats support many of the extensions, they complained that Republicans did not allow them to offer extensions of other provisions and that Congress can’t afford to make them permanent without revenue offsets.

Mel Schwarz
+1 202 521 1564

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