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Strategies for Expired Provisions

As discussed in our seminars, several tax provisions that affect individual taxpayers expired after 2017.  These provisions include, among others, the above-the-line deduction for higher education tuition/fees, the mortgage insurance premiums deduction on Schedule A, the exclusion of income on the discharge of up to $2 million of home acquisition indebtedness secured by a principal residence, and the $500 residential energy property credit.  (See pages 71 to 73 of the M+O=CPE Individual Tax Year-End Workshop Reference Book Tax Year 2018 for a discussion of these provisions.)

Congress could act to retroactively extend some or all of these expired provisions so that they might be available for the 2018 tax year, but there is no way to predict when/if Congress will take such action.  Practitioners with clients who might benefit from the extension of one or more of these provisions should discuss the issue with the affected clients and consider filing extensions for such clients, in case Congress does act.

Practitioners must balance the inconvenience and cost of the extension against the possible tax savings from a provision that might be extended.  If a client’s 2018 returns are already filed and Congress does retroactively extend some/all of these expired provisions, it is likely that the only way the client could benefit from the provision(s) would be to amend the 2018 returns, which might not be cost effective for certain clients.

The information provided herein is provided with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional service. As such, M + O = CPE, Inc. and the author disclaim any responsibility or liability for the information supplied herein or the application of said information.