Victoria Majors Jones, CPA - Blog
Congress has passed and sent to the President for his signature H.R. 658, the FAA Air Transportation Modernization and Safety Improvement Act (the Act). While focusing on subjects such as improved aviation safety and capacity, and streamlined aviation programs, this legislation carries tax changes, including a change for certain corporations repurchasing debt, new rollover options for certain qualifying airline employees, and a number of aviation-related excise tax changes.
The IRS website now has an on-line search tool that allows users to select an exempt organization and check information about its federal tax status and filings. You can now search for organizations that:
Are eligible to receive tax-deductible charitable contributions (Publication 78 data),
Have had their tax-exempt status automatically revoked because they have not filed Form 990 series returns or notices annually as required for three consecutive years (Auto-Revocation List),
Have filed a Form 990-N annual electronic notice (e-Postcard).
The Exempt Organizations Select Check webpage can be accessed at
The Jan. 17, 2012 deadline is fast approaching for estates of decedents who died in 2010 to choose zero estate tax—with beneficiaries being limited to the decedents' basis plus certain increases under Code Sec. 1022—by filing a Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent. (Please be sure to consult a professional tax advisor before electing zero estate taxes as it will not always give you the best tax benefit. )
The Code Sec. 25C credit can apply to relatively inexpensive, easy-to-do items—the installation of insulation (exterior caulking and weather-stripping), doors, and windows—as well as central air conditioning and heat pumps. However, currently this credit only applies through 2011, and extension is uncertain. Therefore homeowners should consider accelerating energy-saving home improvements into this year if doing so will generate a credit.
The nonbusiness energy property credit, is claimed on Form 5695 and is equal to 10% of the cost of: (1) qualified energy efficiency improvements, and (2) residential energy property expenditures. There is a lifetime credit limit of $500 (with no more than $200 due to windows and skylights) over the total credits allowed to the taxpayer for all earlier tax years ending after 2005. The expenses must be for property originally placed in service by the taxpayer and made on or in connection with a dwelling unit located in the U.S., and owned and used by taxpayer as his principal residence at the time of installation.
Qualified energy efficiency improvements are energy efficient building envelope components, such as (a) insulation materials or systems specifically and primarily designed to reduce heat loss/gain that meet criteria set by the International Energy Conservation Code (IECC); or (b) exterior windows, skylights or doors, or any metal roof with pigmented coating or asphalt roof with cooling granules specifically designed to reduce heat gain, installed on a dwelling unit that meet Energy Star program requirements. The component must be expected to last for at least five years. This requirement is met if the manufacturer offers a two-year warranty to repair or replace at no extra charge.
Residential energy property expenses are expenses for qualified energy property (including labor costs for onsite preparation, assembly, or original installation) that meets specific standards set out in Code Sec. 25C(d). The credit allowed for energy property expenditures can't exceed:
$300 for any energy-efficient building property (electric heat pump water heater, electric heat pump; central air conditioner; natural gas, propane or oil water heater; or a stove burning biomass fuel to heat or provide hot water to a taxpayer's residence in the U.S.) that meets specific energy efficiency standards;
$150 for a qualified natural gas, propane, or oil furnace; or qualified natural gas, propane, or oil hot water boiler; or
$50 for an advanced main air circulating fan.
There's no credit for expenditures made from subsidized energy financing.
This credit has a long history of extension. So it is possible that it could be extended again past the 12/31/11 expiration date. However, congress' attitude toward the credit appeared to have changed substantially when it was extended last time, so this could very well be your last chance to take advantage of it.