Newsletter 2012

Newsletter 2012

Businesses

Businesses

Print Full Article

Last Reviewed: Jan 2013

Last Modified: Jan 2013

placeholder

Fiscal Cliff Provisions for Businesses

  • The ability to deduct the full cost of equipment purchases under Section 179 received a reprieve of sorts. New lower limits were replaced with much higher amounts. For 2012 and 2013 the expensing limit for new or used equipment is $500,000 with an overall asset purchase limit of $2,000,000. Bonus depreciation for 50% of new asset purchases was extended for 2013.
  • The use of 15 year straight line depreciation for certain leasehold improvements instead of the much longer conventional write off was revived for 2012 and extended for 2013 as well.
  • A provision for excluding 100% of the gain realized on the sale of stock in certain types of corporations was revived for 2012 and extended through 2013. The types of companies this provision applies to is very limited (does not apply to professional service companies, farms, restaurants and financial businesses).
  • The shortened holding period to avoid built-in gains tax on S-Corp assets originally held by a C-Corp was revived for 2012 and extended for 2013.

Other Notable Issues for Businesses

Clients that we believe might have a 1099 filing requirement will receive a summary of the current 1099 reporting rules and forms to complete and return to us providing the information we need to complete those filings. If you have not received this package and think you may need to file these forms, please contact us to discuss your situation. There is information about 1099 reporting posted on our website and a new online survey you can work through to get a rough idea whether you are required to file 1099s.

The City of Portland Revenue Bureau has made changes to its portion of the City/County combined income tax. The City will no longer grant an exemption to individuals whose only business activity is renting or leasing less than ten residential units. If gross receipts from all business sources are less than $50,000 a taxpayer with fewer than ten rentals will still be exempt from tax, but will now need to file the exemption form each year. The County exemption rules have not changed.