On December 16th, 2014 the tax extenders bill finally passed in the Senate by a 76-16 vote and is on its way to the President’s desk. As we mentioned in our update when it passed the House, among the 55 provisions included in the bill are the reduced five-year built-in gains holding period and the basis adjustment fix for charitable contributions. Unfortunately, the bill is a one year retroactive extension of the expired provisions through 2014, and will therefore expire in two weeks at the end of 2014.
Interestingly, Senate Finance Chairman Ron Wyden (D-OR) voted against the bill, as did Sen. Rob Portman (R-OH), highlighting the ridiculous nature of a one-year retroactive extension for tax policy. (The 16 “no” votes were a bipartisan affair: 8 members of each party opposed the bill.) Speaking last night, Chairman Wyden said: “This tax bill doesn’t have the shelf life of a carton of eggs,” Wyden said in a floor statement ahead of the vote. “The only new effects of this legislation apply to the next two weeks.” He was not alone in his frustration. Sen. Portman also took to the floor to vent his frustration: “This is ridiculous because we’re not extending it beyond the tax year and by the time we get back here, it will already be expired for a week or two…it is a failure of Washington again to get its act together and do what should be done.” “I’d much rather have had a two-year bill so people had the certainty of planning for next year,” said Sen. Bill Nelson (D-Fla.). “But you have to take what you can get.”
General sentiments were that the $42 billion retroactive bill was better than nothing. Congress is now adjourned for the holidays and will start up again January 6th. That means the Senate Finance Committee will have to pick up negotiations again when they return in but Hatch, the incoming chairman of the committee, wouldn’t commit to when that work would start. ”We’re going to have to work on it, there’s no question about it,” Hatch said. “I just wish we could get permanency.”