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Tax Changes Enacted In 2004
Working Families Tax Relied Act of 2004 Enacted October 4, 2004
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Continues Section 179 small business write-off of personal property and software up to $102,000 a year, but SUV’s are limited to $25,000
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2004 is the last year for 30% or 50% additional bonus depreciation; take it now for 2004
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Continues tax credits for electric vehicles and deductions for clean fuel vehicles
2004 American Jobs Creation Act Enacted October 22, 2004
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The home sale exclusion up to $500,000 for married couples ($250,000 for single) will not apply if the principal residence was acquired in a like-kind exchange within the prior five years
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Leasehold improvements can now be depreciated over 15 years instead of 39 years
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In the first year of a business, $5,000 in start-up costs and $5,000 in organizational costs can be written off instead of amortized over 15 years.
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Deduction for donated vehicles over $500 is limited to the gross proceeds received from its sale, and written acknowledgement from the
done must be attached to the tax return.
Damage
Control After Enron and 9/11/2001
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New penalty of $100,000 for willful failure to report interest in foreign financial accounts
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New $100,000 penalty for individuals and $200,000 for corporations for failure to report listed tax shelters.
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New $100,000 penalty for tax avoidance schemes.
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The IRS is now able to seize retirement accounts if the IRS files criminal charges
Pork
Barrel Tax Legislation
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Permanent motor sports racetrack complexes can be depreciated over 7 years
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Non-commercial aircraft can still qualify for the bonus depreciation
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Bank holding companies can escape the S corporation passive investment income rules now
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Indian employment tax credits and Indian reservation accelerated depreciation provisions were extended through 2005
New Rule Effective 2005 from 1998 Tax Act
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