Tax Law Highlights - 2012

There is a longer write-off period for certain realty property. For specialized realty assets (qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property) placed in service after 2011, a 39-year (up from 15-year) write-off period generally applies.

The Work opportunity tax credit (WOTC) is not available except for hiring qualified veterans. The WOTC under Code Sec. 51 generally can't be claimed for an individual who begins work for the employer after Dec. 31, 2011. However, the WOTC continues to be available for employers that hire qualified veterans who began work for the employer before Jan. 1, 2013.

For qualified property acquired and placed in service in 2016, a 50% bonus first-year depreciation allowance applies under Code Sec. 168(k).

For a tax year beginning in 2012, the Code Sec.179 expensing election which was supposed to have been reduced to $139,000 was increased under the American Tax Relief Act of 2012. The new law restores the 2011 limits of $500,000 as a maximum deduction with a $2 million threshold through 2013

New for 2011 and 2012 is a concept named portability which allows a surviving spouse's estate to use any portion of the exemption amount not used by the other spouse’s estate.
For decedents and gifts made in 2011, a unified credit of $1,730,800 is allowed which is the equivalent of a $5 million dollar exemption is subtracted from the tax calculated on the taxable estate.
For 2012 the $5 Million exemption may be increased for inflation.