In 2015, the Protecting Americans from Tax Hikes Act was passed, otherwise known as the PATH Act. The PATH Act was seemingly self-explanatory, as it aimed to guard Americans from enduring pricey tax hikes. However, there were many parts that left Americans confused, and like many bills passed in recent years it’s a work in progress. This past week, however, the IRS has issued some key points of guidance regarding the PATH Act.
A new revenue procedure was released, Revenue Procedure 2017-33, with tax rules as the primary focus. While the PATH Act sought to extend the life of some short-lived tax breaks when it was passed toward the close of 2015, there were some holes in the permanency of some of these breaks—especially now as the Trump Administration readies its own tax reform bill. However, for now, some tax breaks have been made permanent. Section 179 of the Internal Revenue Code is one of them, where Section 179 property deductions includes qualified real property, with eligibility for qualified air conditioners and heaters. Section 168(k) has also been amended to reflect the extension of placed-in-service dates regarding depreciation deduction for qualified property.
There are other key changes that have been made. However, the crux of the changes involve how we define qualified property and what happens with first-year depreciation and the taxable years that follow. This information is pertinent to anyone with real concerns over real property taxes. While many of these changes are perceived to be “permanent,” we should be mindful they can also change with the new administration.
To read the latest revenue procedure in its entirety, click here.
In 2015, the Protecting Americans from Tax Hikes Act was passed, otherwise known as the PATH Act. The PATH Act was seemingly self-explanatory, as it aimed to guard Americans from enduring pricey tax hikes.