H.R. 1, commonly referred to as the Tax Cuts and Jobs Act, implements sweeping changes to the U.S. tax system. These changes will alter the fundamental tax principles upon which many investment and organizational decisions by the private investment industry were made.
Lawyers in our Tax and Private Investment Funds groups hosted a 1-hour webinar highlighting the key provisions of the new tax law, its implications on the private investment industry, and action items for the private investment community in the coming year and beyond.
Key changes include:
Tax Rates/Taxable Income
- 21% corporation; 37% individuals
- Non corporate taxpayers eligible for 20% deduction of certain pass through income
- Carried interest rule
- Non-U.S. persons subject to tax on gains from sale of pass through entities that conduct a U.S. business
- U.S. corporations not subject to tax on certain foreign source dividends
Deductions
- Elimination of certain previously itemized deductions
- Limitation on NOLs
- Limitation on tax exempts to use losses to offset other income
- Accelerated depreciation
- Limitation on interest deductions
New Tax Law (H.R. 1): Key Highlights For Private Investment Funds