The Tax Cuts and Jobs Act of 2017 and the recent taxpayer victory in the U.S. Tax Court’s Lender Management, LLC decision have created important planning opportunities for closely held and family-controlled entities in 2018.
Although business-related settlement payments (and attorneys’ fees) are generally tax-deductible, the 2017 Tax Cuts and Jobs Act (the Tax Act) restricts an employer’s ability to obtain tax deductions fo
The 2017 Tax Cuts and Jobs Act significantly affects the ability of the managers of investment funds to receive long-term capital gains with respect to their carried interest. Under current law, the manager of an investment fund can receive a “profits interest” (also known as a “carried interest” or a “promoted interest”) tax-free. In addition, there is a three-year hold requirement for carried interests.
The benefits of the U.S. 2017 tax reform act (the Act) should be broadly felt by Americans, and businesses large and small will see tax relief. The Act contains elements important for stronger economic growth—a competitive corporate tax rate and a move toward a territorial system of international taxation. At the same time, the House and Senate tax-writing committees have indicated that there may be a need to consider technical corrections or more substantive changes to the Act.
As major tax changes to the U.S. tax code start to take form, our always-popular Annual Estate Planning Update webinar couldn't be more timely. Tom Abendroth of Schiff Hardin and Jeff Saccacio of PwC led participants through a thoughtful discussion of some of the most important topics and developments that were covered at the 52nd Annual Heckerling Institute on Estate Planning.
The Tax Cuts and Jobs Act (TCJA) is here to stay and its provisions change the landscape of the private equity world going forward. The decrease in corporate rates coupled with new net operating loss limitations, corporate alternative minimum tax repeal, and accelerated expenditures will directly impact how the value and price modeling of deals are calculated. When all of the TCJA provisions roll out, deal teams will have many additional tax attribute facets to consider when acquiring or exiting an investment.
Under prior law, the Internal Revenue Code provided that employers would be allowed deductions for operating privately owned aircraft attributable to business flights. Under the new law, though, expenses attributable to entertainment activities will now be 100 percent non-deductible, whereas in the past they were 50 percent deductible. Other changes were made and employers must alter how they categorize flights for the new rules.
The Tax Cuts and Jobs Act will dramatically change how income is taxed for business owners of pass-through entities, such as certain partnerships, limited liability companies, and S corporations. As of January 1, 2018, owners of pass-through entities may deduct up to 20 percent of their “qualified business income” from their taxable income each year. This creates huge incentives for business owners to organize their business as “pass-through” entities. This article breaks down how the pass-through deduction works and what types of businesses may benefit.
What does the passage of the Tax Cuts and Jobs Act mean for high-net-worth taxpayers? Comparing the Act to current law, we outline the provisions and focus on the proposals most relevant to high income and high-net-worth taxpayers and businesses.
At more than one thousand pages, the new tax reform package has plenty of both carrots and sticks for U.S. taxpayers. Both the short- and long-term effects of the new legislation on economic growth in the U.S. are uncertain at this point, but changes in the tax code will undoubtedly confer both benefits and penalties on certain segments of the U.S. economy. Until the tax accountants ferret out every new wrinkle, let’s examine the most likely impacts that the new law will have on the investment landscape in the coming years.