Daily Tax Update - June 10, 2010

HOUSE MAY ACT ON SMALL BUSINESS JOBS BILL THIS WEEK: The House may consider the “Small Business Jobs Tax Relief Act of 2010” (H.R. 5486) today or tomorrow. The bill would exempt from tax any capital gains from the sale of stock issued by qualifying small businesses under section 1202. The American Reinvestment and Recovery Act (the “Recovery Act”) temporarily increased the Section 1202 exclusion to 75 percent for qualifying stock acquired in 2009 and 2010. The bill would temporarily increase the amount of the exclusion to 100 percent for qualifying stock acquired after March 15, 2010 and before January 1, 2012.

  • The bill would also reduce the nondisclosure penalty for reportable and listed transactions, raise the deduction for start up expenditures from $5,000 to $20,000, and exempt Small Business Administration guaranteed loans from the “at risk” rules for nonrecourse loans. The offsets would raise $1.8 billion over 10 years by removing crude tall oil from the cellulosic biofuel producers credit and $5.3 billion by requiring a 10-year term for grantor retained annuity trusts (GRATs).
  • A summary and text of the bill can be accessed here.

TAX BILLS INTRODUCED JUNE 9TH
H.R.5486: To amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes.
Sponsor: Rep Levin, Sander M. [MI-12] (introduced 6/9/2010) Cosponsors (None)

H.R.5490: To amend the Internal Revenue Code of 1986 to allow a credit against excise taxes with respect to distilled spirits and wine for certain distilled spirits or wine produced from domestic agricultural waste or byproducts.
Sponsor: Rep Brown-Waite, Ginny [FL-5] (introduced 6/9/2010) Cosponsors (None)

H.R.5491: To amend the Internal Revenue Code of 1986 to provide a refundable credit for taxpayers with long-term care needs.
Sponsor: Rep Carney, Christopher P. [PA-10] (introduced 6/9/2010) Cosponsors (1)

S.AMDT.4318 to H.R.4213 To amend the Internal Revenue Code of 1986 to eliminate big oil and gas company tax loopholes, and to use the resulting increase in revenues to reduce the deficit and to invest in energy efficiency and conservation.
Sponsor: Sen Sanders, Bernard [VT] (introduced 6/9/2010) Cosponsors (2)

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
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