McGuire Woods has published an article on its website, entitled “Tax Reform Law’s Impact on Businesses and Their Owners.” The article begins as follows:
On Dec. 22, President Donald Trump signed into law the tax reform bill, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (H.R. 1). This legislation is considered the most significant overhaul of the U.S. tax code since 1986. Generally applying to taxable years beginning on and after Jan. 1, 2018, the changes will have a profound impact on individuals and businesses in a variety of ways.
Generally, the new tax law alters individual income taxation, reduces corporate income taxes and introduces a new form of taxing the earnings from certain pass-through entities. In addition, the law moves the United States toward a modified territorial system that alters the current tax landscape for multinational entities. This alert addresses provisions of the new law that are most relevant to businesses and their owners.
The key provisions of the article include the following:
- Individual income tax rates.
- Taxation on US Businesses, including the following.
- Corporate income tax and AMT.
- Corporate NOLs.
- Deduction for qualified business income of pass throughs.
- Carried interest.
- Business interest expenses.
- Bonus depreciation.
- Like-kind exchanges of real property.
- Partnership technical terminations.
- Section 199 Deductions.
- International tax, including following:
- new participation tax exemption.
- tax on deemed repatriation if accumulated foreign earnings.
- rules to minimize base erosion.
- other tax rules.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.