Yes, this provision has been extended. For stock acquired after September 27, 2010 and before January 1, 2011, and held for at least five years, the 2010 Small Business Jobs Act provides for an exclusion of 100%. The 2010 Tax Relief Act extends the 100% exclusion for one more year, for stock acquired before January 1, 2012. Stock issued after December 31, 2011 reverts to the standard 50% exclusion.

Thank you for your post Ron.

My current thought is that the Research credit will be extended. It has been extended 13 times already and it should be extended again without any lapse. Both political parties are in favor of it. The past few Presidents ‘of the United States have stated that the Research credit should be made permanent. The Research credit has a lot of support.

Furthermore, the research credit is part of an Extenders package that contains a number of different tax items - many of which would be considered “politically unfavorable” for the members of Congress if it were to not be extended including a number of key personal and business tax breaks that are consistently used annually. The reason the last extenders bill stalled (around Memorial Day) came down to the disagreement on how the Extenders legislation would be paid for – not due to “if” this legislation should be extended.

However, the longer the wait the better chance a lapse in credit could occur. A few years ago, it wasn’t until December 20, that the Extenders Bill was signed into law – almost a full 12 months after the credit had expired – although it extended the credit with no break in benefit.

That is my opinion.

Mark

Great point. I'd suggest documenting the specific control held by the independent contractor in performing the duties to be fulfilled. Again, control is the key. You can't have the company control, and then agree to treat the person as an independent contractor. The facts have to support a true independent contractor relationship. Even if everyone agrees to treat the person as an independent contractor, if the facts establish an employer-employee relationship, then that is how the relationship should, and if put to the test, will ultimately be, treated.