Congress recently signed a spending bill that funds the federal government through September 30, 2018, avoiding another last-minute federal government shutdown. The spending bill contained several tax-related technical corrections:
- Farmers: A fix to the “grain glitch” to change the provision in the TCJA that provided farmers a greater tax deduction for selling to farmer-owned cooperatives rather than other types of buyers.
- Partnerships: Provisions to correct and clarify the partnership audit rules enacted under the Bipartisan Budget Act of 2015. (Don’t forget that new IRS audit rules apply to partnership tax returns for tax years beginning after December 31, 2017, requiring various updates to all partnership agreements.)
- Low-Income Housing Developers and Investors: A four-year expansion of the low-income housing tax credit, obtained by Democrats in exchange for agreeing to the tax law fix. The spending bill increases the total credit allocation for calendar years 2018 through 2021 by 12.5 percent and modifies the income averaging test.