HR 533 — Opportunity for Family Farms and Small Businesses Act of 2009

Summary

Opportunity for Family Farms and Small Businesses Act of 2009 - Makes permanent the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) that repeal the estate and generation skipping transfer taxes and that make reductions in the gift tax. Amends the Internal Revenue Code to: (1) increase to $200,000 and make permanent the expensing allowance (i.e., a tax deduction in the current taxable year) for depreciable business assets; (2) increase the threshold for phaseout of such allowance to $800,000 (the cost basis of property placed in service); (3) allow an inflation adjustment to the expensing and threshold amounts after 2009; (4) make permanent the right of a taxpayer to revoke an election to expense business assets; (5) make permanent the inclusion of certain computer software as property eligible for expensing; and (6) allow self-employment health insurance costs as a deduction in determining net self-employment income.

Bill Text

• Introduced Introduced in House Current html January 14, 2009

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill makes permanent various tax provisions including full estate tax repeal, increased small business expensing limits, and permanent health insurance deductions for self-employed individuals.

• Section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001

  Section 901 shall not apply to title V of such Act.

  This change permanently repeals the estate tax provisions set to expire.

• section 179(b)(1) of the Internal Revenue Code of 1986

  $25,000 ($125,000 in the case of taxable years beginning after 2006 and before 2011) → $200,000

  Increases the maximum allowable expense deduction for small businesses permanently.

• section 179(b)(2) of the Internal Revenue Code of 1986

  The limitation shall be reduced (but not below zero) by one-half of the amount by which the cost of section 179 property placed in service during such taxable year exceeds $800,000. → (2) Reduction in limitation.--The limitation under paragraph (1) for any taxable year shall be reduced (but not below zero) by one-half of the amount by which the cost of section 179 property placed in service during such taxable year exceeds $800,000.

  Clarifies the calculation for reduction in the limitation for property expense deductions.

• section 179(b)(5)(A) of the Internal Revenue Code of 1986

  2007 and before 2011, the $125,000 and $500,000 → 2009, the $200,000 and $800,000

  Updates the base amounts for inflation adjustments aligning them with the new expense limits.

• section 179(b)(5)(A) of the Internal Revenue Code of 1986

  calendar year 2006 → calendar year 2008

  Adjusts the calendar year for which inflation adjustments are based.

• section 179(c)(2) of the Internal Revenue Code of 1986

  and before 2011

  Makes the election revocation for section 179 deductions permanent.

• section 179(d)(1)(A)(ii) of the Internal Revenue Code of 1986

  and before 2011

  Removes the expiration date for off-the-shelf computer software deductions.

• subsection (l) of section 162 of the Internal Revenue Code of 1986

  paragraph (4)

  Eliminates the specific paragraph limiting the health insurance tax deduction for self-employed individuals.

Action History

1. January 14, 2009

   Referred to the House Committee on Ways and Means.

Subjects