House Committee on Ways and Means

Sustainable Aviation Fuel Credit

The Inflation Reduction Act created a new tax credit of up to $1.75 per gallon for sustainable aviation fuel. The credit begins on January 1, 2023, and ends on December 31, 2024. Thereafter, a new “clean fuel” tax credit is due to begin in 2025, providing similar subsidies for sustainable aviation fuel. Fuels qualifying for […]

Clean Fuel Production Credit

New production tax credit of at least $0.20 per gallon, up to $1 per gallon, adjusted for inflation, for fuel produced from 2025-2027. Sustainable aviation fuel could receive credit of up to $1.75/gallon. Tax credit would enter into force after biomass-based diesel tax credit expires in 2024. Carbon intensity of fuels must be less than […]

Passive Loss Limitations Exemption

Passive business activity refers to any activity in which a taxpayer has an economic interest but does not “materially participate.” Normally, taxpayers are allowed to deduct the losses they incur from passive activities (passive losses), but only an amount equal to income generated from the activity. Any excess of passive losses over passive income in […]

Amortization for Certain Pollution Control Facilities

Amortization for certain pollution control facilities provides an option to amortize investments in pollution control equipment for coal-fired electric generation plants over seven years. Amortization is a method of depreciation that recovers investment costs evenly (i.e., straight line depreciation) over the recovery period. The standard recovery period for the conventional type of electric generating equipment […]

Amortization and Expensing of Reforestation Expenditures

The amortization and expensing of reforestation expenditures provision of the tax code allows for the deduction of up to $10,000 per year ($5,000 for married individuals filing separately from their spouses; no limit for trusts) of qualifying reforestation costs paid or incurred after Oct. 22, 2004, for each qualified timber property. The remaining costs in […]

Amortization of Geological and Geophysical Expenditures

Geological and geophysical expenditures are the costs oil and gas companies incur when gathering data used to determine where oil and gas is located, and in what amounts, as well as where drilling may be most appropriate. They include seismic surveys, electromagnetic surveys, other types of remote sensing, shallow test drilling and bottom sampling. Amortization […]

Excess of Percentage Over Cost Depletion, Nonfuel Minerals

Businesses are generally allowed to recoup the capital costs associated with acquiring or creating an asset by deducting them from their taxable income. Typically, the costs are depreciated—deducted each year in proportion to the remaining useful life of the asset, corresponding to the income it generates. For natural resource assets, the costs of acquiring the […]

Capital Gains Treatment for Income from Qualified Timber

Individual owners, as opposed to companies, are allowed to treat income from dispositions of timber held for more than one year before disposal as a capital gain, rather than ordinary income, thus allowing them to be taxed at a lower rate. Income from cutting timber which has been owned, or the right to cut which […]