Baker Botts tax partners can speak on the House tax bill and how it will impact different industries.
“The House Tax Bill seemingly delivers on its promise of international tax reform, with a move to a territorial tax system, but a number of questions remain as to the proposed repatriation tax, changes to the “controlled foreign corporation” rules and other related matters. Blanks need to be filled,” said Washington D.C. partner, Don Lonczak.
“Under the House bill, the lower tax rate for income earned through pass-through entities is broadly applicable to public investors at all income levels. This retains the existing tax advantage of MLPs over C corporations, even after considering the bill’s lower tax rate for C corporations,” said Houston partner, Mike Bresson.
“If something like this bill passes into law, it returns us to a scenario much like 2001-2010 when we gradually saw the estate tax exemption increasing and then had repeal in 2010 (for only that one year, it turns out),” said Houston partner, Stephen Dyer. “If we ever did get to a repeal of the estate tax with an increase in the gift tax exemption, as is proposed, then client planning opportunities would increase significantly. The gift tax exemption increase would be a big deal because most people would expect estate tax repeal to be temporary.”
“The House tax reform proposals generally provide fair and workable changes for the real estate industry and alleviate some of the concerns that the prior tax reform blueprints and outlines raised," said Dallas partner, Steve Marcus.
“Under the House proposals, the limitations on interest deductibility generally would not be applicable to real estate businesses, the lower tax rates applicable to income from pass-through entities generally are applicable, and the difference in combined entity and shareholder level tax rates applicable to investments in REITs, as compared to investments in C corporations, is generally preserved,” Marcus states.
Baker Botts Houston partner, Gail Stewart notes, “In a game-changing proposal, the legislation takes aim at taxation of popular deferred compensation arrangements that are often provided to executives.” Stewart adds, “Companies that provide stock options, restricted stock units and deferred compensation arrangements would need to quickly assess the impact of the proposed law, which will impact compensation awarded for services after January 1, 2018. Public company deductions for compensation to certain executive officers will also be impacted.”
Please contact Sheena Cochran to schedule an interview at [email protected] or 713.229.1964.
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