- September 22, 2016
- September 8, 2016
- August 18, 2016
The House on July 15 passed legislation to fund highway spending through December 18. The bill includes several tax compliance offsets that modify tax return filing dates for multifamily partnerships and estate tax reporting requirements. The Senate is also slated to begin consideration of highway funding next Tuesday. However, it’s unclear if that chamber will seek to modify tax provisions in the House bill in favor of a longer-term extension of highway funding.
House Highway Bill
The tax compliance provisions in the House highway bill would require partnerships to file tax returns by March 15 (or two and a half months after the close of its tax year). And C corporations would be required to file tax returns by April 15 (or three and a half months after the close of its tax year). Under current law, partnerships are required to file tax returns by April 15 while C corporations must file by March 15.
The House bill also, notably, sets aside a proposal to streamline partnership audits that would inhibit real estate investment. The Ways and Means Committee is currently reviewing stakeholder input. This includes an NAA/NMHC comment letter about provisions that would make any partner jointly and severally liable for a partnership’s entire tax liability.
Estate Tax Reporting
Another revenue offset in the House highway bill would mandate that estates report the value of property transferred to decedents and the IRS. This would prevent decedents from inflating their basis in inherited property and, thereby, reducing their tax liabilities when they sell acquired assets.
The House highway bill also leaves unsettled the fate of several dozen expired tax provisions providing incentives for investment, construction of low-income housing and energy-efficiency. Congress extended these so-called tax extenders last December through 2014. So they must be addressed again this year. Because of disagreements between the House and Senate on timing, the related political wrangling could drag into the fall.
The House hopes to use the next several months to draft a multi-year highway bill that would reform the nation’s international tax laws and carry tax extenders. If that effort does not prove fruitful, Ways and Means Committee Chairman Paul Ryan (R-WI) has indicated he could move a standalone extenders package as soon as September, which could also make permanent several expired provisions.
The following tax extenders would impact the multifamily industry most:
Provided by NMHC as part of the NAA/NMHC Joint Legislative Program
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