Details from the Bipartisan Budget Act of 2018

February 15, 2018

Even if you aren't concerned with politics in general, the budget act does have pertinent tax implications.

On February 9, 2018, the President signed into law H.R. 1892, the Bipartisan Budget Act of 2018, which extends federal funding for the government. The law also contains a number of tax provisions, including the extension of a number of provisions that had expired as of the end of 2016. These changes affect the preparation of 2017 tax returns. The following is our coverage of the new law.

Extension of Expiring Provisions
A number of tax provisions expired on December 31, 2016 and were not extended by the Tax Cuts and Jobs Act (Public Law 115-97) that was signed into law on December 22, 2017. The Bipartisan Budget Act of 2018 extends the following tax provisions for the 2017 tax year. All of these provisions now expire on December 31, 2017:

  • - Cancellation of qualified principal residence indebtedness exclusion (IRC §108)
  • - Mortgage insurance premiums deduction (IRC §163).
  • - Tuition and fees deduction (IRC §222)
  • - Indian employment credit (IRC §45A).
  • - Railroad track maintenance credit (IRC §45G).
  • - Mine rescue team training credit (IRC §45N).
  • - Race horse two years old or younger treated as 3-year property instead of 7-year property [IRC §168(e)(3)].
  • - Motor sports entertainment complexes treated as 7-year property [IRC §168(e)(3) and §168(i)(15)].
  • - Indian reservation property accelerated depreciation recovery periods [IRC §168(j)].
  • - Mine safety equipment expense election (IRC §179E).
  • - Special expensing rules for certain film, television, and live theatrical productions (IRC §181).
  • - Domestic production activities deduction for activities located in Puerto Rico (IRC §199).
    Note: The domestic production activities deduction for all activities was repealed by the Tax Cuts and Jobs Act for tax years beginning after December 31, 2017.
  • - Special rate for qualified timber gains (IRC §1201).
    Note: IRC section 1201 refers to AMT for C corporations which was repealed by the Tax Cuts and Jobs Act for tax years beginning after December 31, 2017.
  • - Empowerment zone tax incentives [IRC §1391(d)].
  • - American Samoa economic development credit [Public Law 109-432, section 119].
  • - Nonbusiness energy property credit (IRC §25C).
  • - Alternative motor vehicle credit for qualified fuel cell motor vehicles [IRC §30B(k)(1)].
  • - Alternative fuel vehicle refueling property credit (IRC §30C).
  • - Electric vehicle credit for highway-capable 2-wheeled vehicles (IRC §30D).
  • - Second generation biofuel producer credit [IRC §40(b)].
  • - Biodiesel and renewable diesel fuels credit (IRC §40A).
    Note: Excise tax incentives for biodiesel and renewable diesel fuels under IRC section 6426(c) are also extended and modified.
  • - Indian coal production credit [IRC §45(e)].
  • - Electricity production credit or investment credit in lieu of the production credit for non-wind renewable power facilities [IRC §45(d) and §48(a)].
  • - Energy efficient home credit (IRC §45L).
  • - Special depreciation allowance for second generation biofuel plant property [IRC §168(l)].
  • - Energy efficient commercial building property deduction (IRC §179D).
  • - Special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy [IRC §451(k)].
  • - Alternative fuels excise tax credit [IRC §6426(d) and §6426(e)].

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