Code Section 1391
| Code Section | Effective Date | Name of Act | Name of Provision | 10yr Revenue Estimate ($millions) |
|---|---|---|---|---|
| 1202, 1391 | *12/31/2011 | The American Taxpayer Relief Act of 2012 | Empowerment zone tax incentives | -450 |
| 1202, 1391 | *12/31/2009 | The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 | Empowerment zone tax incentives | -387 |
* Notes on Effective Date
The provision relating to the designation of an empowerment zone and the provision relating to the exclusion of gain from the sale or exchange of qualified small business stock held for more than five years applies to periods after the effective date.
Empowerment zone tax incentives
Explanation of Provision
The provision extends for two years, through December 31, 2013, the period for which the designation of an empowerment zone is in effect, thus extending for two years the empowerment zone tax incentives, including the wage credit, increased section 179 expensing for qualifying equipment, tax-exempt bond financing, and deferral of capital gains tax on sale of qualified assets replaced with other qualified assets.534 In the case of a designation of an empowerment zone the nomination for which included a termination date which is December 31, 2011, termination shall not apply with respect to such designation if the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary may provide.
The provision extends for two years, through December 31, 2018, the period for which the percentage exclusion for qualified small business stock (of a corporation which is a qualified business entity) acquired on or before February 17, 2009 is 60 percent. Gain attributable to periods after December 31, 2018 for qualified small business stock acquired on or before February 17, 2009 or after December 31, 2013 is subject to the general rule which provides for a percentage exclusion of 50 percent.
Empowerment zone tax incentives
Explanation of Provision
The provision extends for two years, through December 31, 2011, the period for which the designation of an empowerment zone is in effect, thus extending for two years the empowerment zone tax incentives, including the wage credit, accelerated depreciation deductions on qualifying equipment, tax-exempt bond financing, and deferral of capital gains tax on sale of qualified assets sold and replaced. In the case of a designation of an empowerment zone the nomination for which included a termination date which is December 31, 2009, termination shall not apply with respect to such designation if the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary may provide.
The provision extends for two years, through December 31, 2016, the period for which the percentage exclusion for qualified small business stock (of a corporation which is a qualified business entity) acquired on or before February 17, 2009 is 60 percent. Gain attributable to periods after December 31, 2016 for qualified small business stock acquired on or before February 17, 2009 or after December 31, 2011 is subject to the general rule which provides for a percentage exclusion of 50 percent.
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534- A technical correction may be necessary to clarify that the elective rollover provision applies
to qualified empowerment zone assets acquired after December 21, 2000 and before January
1, 2014.
-Return to Explanation of Provision