Congress: How About a Mulligan for the Accelerated Election?
5 Pages Posted: 5 Dec 2013
Date Written: January 12, 2009
One of the stimulus provisions in the Housing Assistance Tax Act of 2008 was the addition of section 168(k)(4). That provision allows a rare opportunity for corporate taxpayers: the ability to cash in unused research and alternative minimum tax credit carryovers, at the cost of surrendering bonus depreciation on specified properties placed in service in 2008. The credits used under this election are refundable, an unusual trait in corporate tax law, allowing taxpayers to monetize credit carryforwards that were thought otherwise to be deferred for years or simply lost forever. However, a combination of unanswered questions, unintended consequences, and a much-too-short time frame for election all have made this provision a candidate for renewal.
Keywords: tax credit, stimulus, election, monetize, unused credits, research credit, AMT credits, depreciation
JEL Classification: H21, H25, E62, K34
Suggested Citation: Suggested Citation