© 2009, Ice Miller LLP
Impact	Change	Guidelines Under Stimulus Package	Contact
Corporate Tax			Paul Jones - paul.jones@icemiller.com
Net Operating Losses	Extends carryback period for net operating losses from 2 years to up to 5 years for certain businesses	Carryback period extended to 5 years for businesses with receipts under $15 million over the 3 years prior to the loss.
Expense vs. Depreciate Equipment	Extends financial limits for code section 179 (small business) expensing	2008 limits of $250,000 and $800,000 extended into 2009.  Previously these limits were scheduled to revert back to $125,000 and $500,000 in 2009.
Depreciation Provision	Bonus depreciation to property placed in service in 2009 will be allowed.  Some long-lived property will qualify	Certain property placed in service in 2008 and 2009 will qualify for 50% of the depreciation to be recovered immediately, with the remaining being depreciated under the standard rules.
AMT and R&D Credits	Extends the AMT and R&D credit carryovers	Taxpayers can elect to "cash out" (in the form of refundable credit) in 2008 and/or 2009.  Limitations will be separately applied.
Cancellation of Indebtedness Income	Recognition of income spread over 5 years	Under certain circumstances, taxpayers can elect to defer debt re-acquisitions in 2009 and 2010 until 2014, and then recognize income ratably over a five year period.
C Corp. to S Corp. Gains	Shortens the built-in gains tax holding period	Holding period for assets subject to built-in gains tax will be 7 years, instead of 10 years.  Applies to S Corporations that recognize built-in gains in 2009 and 2010.
Tax Credit for Manufacturing Facilities (Advanced Energy Property/Cleantech)	Adds new 30% investment tax credit	Companies that manufacture advanced energy property, which includes technology for the production of renewable energy, energy storage, energy conservation, efficient transmission and distribution of electricity, and carbon capture or sequestration are eligible for the credit.  Generally applies to qualified investments in tangible personal property (and not buildings).  Application and allocation process is required with the Treasury Department for the $2.3 billion in credits that have been authorized.	Read a brief article discussing the impact of this specific change.
Renewable Electricity Production Tax Credit	Extends placed in service date	Extends placed in service date to December 31, 2012 for wind facilities, and to December 31, 2013 for facilities producing electricity from solar energy, biomass, geothermal energy, municipal solid waste, small irrigation power, and qualified hydropower.
Investment Tax Credit	Allows 30% investment tax credit in lieu of production tax credit	Allows temporary election to claim 30% investment credit in lieu of the production tax credit.  Wind facilities formerly qualified for only the production tax credit which is claimed over 10 years.  Investors in wind facilities that are placed in service during 2009 through 2012 can now elect to realize tax benefits sooner as the investment tax credit is claimed over a shorter period of time.
New Market Tax Credits	Increases the level of funding available	New market tax credits are available to investors in corporations with the primary mission of serving low income communities.  Investors who submitted allocation applications in 2008 and did not receive an allocation, may receive the allocation requested in 2009.