Daily Tax Update - June 28, 2010

SENATE HOPEFUL TO PASS SMALL BUSINESS TAX INCENTIVES BILL THIS WEEK: Senate Majority Leader Harry Reid is expected to bring a small business tax incentives bill up for a cloture vote later today. Congress is scheduled to break for its week-long July Fourth recess on Friday.

  • The House passed the bill (H.R. 5486) earlier this month. The House-passed bill includes a 100-percent exclusion for capital gains from the sale of certain section 1202 small business stock that is held for more than five years and acquired between March 15, 2010 and January 1, 2012, and a provision that would increase for 2010 and 2011 the deduction for business start-up expenses from $5,000 to $20,000. The offsets include a provision that would remove crude tall oil from the section 40 cellulosic biofuel producers credit and a provision requiring a 10-year minimum term for grantor retained annuity trusts. The Senate bill is also expected to include a one-year extension of the bonus depreciation provision that expired at the end of 2009.
  • An effort may be made in the Senate to attach an estate tax fix amendment to the small business tax incentives bill. However, Reid said that he would oppose efforts to attach an estate tax amendment to the bill. Last week, Reid said, “We will not have in our legislation, of course, the estate tax. But it appears my friends on the other side of the aisle are more interested in taking care of very, very rich people than taking care of businesspeople and small-business people and working men and women in this country.”

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