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Federal Register Publishes Proposed Transition Tax Regulations

On August 9, 2018, the Federal Register published the Treasury and the IRS’s proposed transition tax regulations. While the IRS had made an initial draft of the proposed regulations available for review, publication in the Federal Register begins the comment period for the proposed regulations. Comments on the proposed regulations must be received by October 9, 2018. Read More: Federal Register, Guidance Regarding the Transition Tax Under Section 965 and Related Provisions
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Proposed Pass-Through Deduction Regulations Released

The IRS has released proposed regulations on section 199A, a provision added by the Tax Cuts and Jobs Act that provides a deduction for certain qualified business income with respect to individuals and pass-through entities. Read more: IRS issues proposed regulations on new 20 percent deduction for passthrough businesses;...
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AICPA and CIMA US Tax Reform Conference 2018

Eversheds Sutherland is the proud lead sponsor of the Association of International Certified Professional Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) US Tax Reform Conference 2018 on September 17, 2018, at the Jumeirah Carlton Tower Hotel in London, United Kingdom. The US and International Eversheds Sutherland Tax team will be chairing the event and will deliver sessions on: Understanding Global Intangible Low-Taxed Income (GILTI) and Foreign Derived Intangible Income (FDII) ES Speakers: US Partner Robb Chase and UK Partner Ben Jones Implications arising...
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Regulations on Bonus Depreciation Are Mostly as Expected

The proposed regulations addressing section 168(k) bonus depreciation largely conform to expectations, however there were a few unanticipated elements. In her recent comments to the press, Ellen McElroy of Eversheds Sutherland (US) LLP highlighted the IRS’ failure to address the drafting error that left qualified improvement property ineligible for bonus depreciation. McElroy also pointed to the narrow interpretation of the written binding contract rule in determining an acquisition date, which disregarded closing dates or letters of intent. Read More: Proposed Bonus Depreciation Regs...
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Proposed Regulations on Contribution Limits for ABLE Act Anticipated

According to recently released Notice 2018-62, the IRS and the Treasury will issue proposed regulations to clarify the new rules regarding the Achieving a Better Life Experience (ABLE) Act. The ABLE program provides tax-advantaged savings accounts for individuals with disabilities. The TCJA increased the contribution limit to ABLE accounts under certain circumstances. The proposed regulations reportedly will clarify the increased contribution limits; confirm that the employed designated beneficiary is solely responsible for ensuring that requirements are met; and provide transition relief...
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Proposed Full Expensing Regulations Released

The IRS has released regulations on the full expensing provisions under section 168(k), as amended by the Tax Cuts and Jobs Act.  That section allows businesses to fully expense certain business assets. Read more: REG-104397-18.
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Proposed Transition Tax Regulations Released

The IRS has released proposed regulations on section 965, a provision created by the 2017 TCJA, which imposes a one-time transition tax on accumulated earnings of foreign subsidiaries of U.S. multinationals. Read more:   IRS Floats Rules On Transition Tax On Foreign Earnings; REG-104226-18
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Full Expensing Regulations Ready for Publication

On July 30, 2018, the Office of Management and Budget (“OMB”) waived its review of the Internal Revenue Service’s (“IRS”) proposed regulations that implement the full expensing provisions of the 2017 tax act. The full expensing provisions allow temporary 100% expensing for certain business assets. With the OMB review complete, the IRS may publish the proposed regulations in the Federal Register. Read more: OMB Waives Review of Treasury’s ‘Full Expensing’ Tax...
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Tax Reform 2.0 Outline Released with Three Main Themes

House Ways and Means Committee Chairman Kevin Brady recently released an outline of the planned tax reform 2.0 legislation. The tax package will focus on making the individual and small business tax cuts permanent; promoting family savings through retirement and section 529 education savings programs; and encouraging the creation and development of new businesses. The legislation will take the form of three individual bills based on each of the three topics. The outline itself contains few details and no cost estimates, and also does not contain technical corrections related to the Tax Cuts...
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OMB’s Review of 199A Regulations to Be Completed in Ten days

Last week, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) received draft proposed computational section 199A regulations from Treasury. OIRA’s expedited deadline for this review is ten business days after receipt of all necessary information, subject to extension as agreed with Treasury. Guidance sent to OIRA is generally subject to a 45-day review period. Read more: OMB Review of Passthrough Deduction Regs is...
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Nunes’s Proposed Legislation Would Consider Inflation in Determining Capital Gains Tax

Devin Nunes, a Republican member of the House Ways and Means Committee, has introduced legislation to index capital gains for inflation. Under Nunes’s legislation, the tax basis of a capital asset for purposes of calculating capital gains would be adjusted for inflation. Republican Senator Ted Cruz has introduced similar legislation in the Senate, and Congressional Republicans are contemplating whether to include the provision in the “phase 2” tax reform legislation. Read more: GOP Tax Writer Introduces Bill to Reduce Capital Gains...
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The Tax Cuts and Jobs Act Could Impact Intangible Valuation

Thomas Amendolari, a senior economist at the Treasury Department, recently stated that many of the fundamental aspects of determining the discount rate, for purposes of valuing intangible transfers under the section 482 regulations, may be affected by the 2017 TCJA. While the economic effects of the TCJA may increase discount rates, Amendolari noted that it is not yet certain and further noted that rising discount rates do not necessarily mean the overall valuation for intangibles should be lowered, because pre-tax cash flows may also be affected. Read more:  TCJA’s Impact on...
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Tax Law Discourages U.S. Investment and Leaves Taxpayers in the Dark, According to New Report from Senate Finance Democrats

A recent report released by the Senate Finance Committee ranking member Ron Wyden asserts that the new tax legislation has resulted in “more complexity, loopholes and incentives to ship jobs overseas.” According to the report, the global intangible low taxed income (“GILTI”) provisions create a new web of complexity and leave taxpayers in the dark regarding future investment decisions. Additionally, instead of discouraging foreign investment, the new provisions reportedly have the opposite effect. With GILTI’s exemption for a routine return on depreciable assets outside of the U.S.,...
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David Kautter Announces that Guidance on the Section 199A Pass-through Deduction will be Released in Weeks

On July 17, 2018, David Kautter, the acting Commissioner of the Internal Revenue Service (“IRS”), announced that the Treasury Department is currently reviewing guidance under section 199A and anticipates the guidance to be released within weeks. Kautter further stated that the IRS is treating the section 199A deduction, the section 59A base erosion and anti-abuse tax (“BEAT”), and the section 951A global intangible low-taxed income (“GILTI”) guidance as integrated projects. While Kautter does not expect guidance on the provisions to be released together, he predicts that guidance on the BEAT...
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Brady Announces that the Outline of Phase 2 of Tax Reform will be Released Next Week

Kevin Brady, Chairman of the House Ways and Means Committee, announced on July 18, 2018 that an outline of the “phase 2” tax reform legislation will be released during the week of July 23rd. Brady also stated that the phase 2 legislation will not include any technical corrections or refinements to the 2017 tax act and that the focus of the legislation will be to make permanent the individual tax cuts of the 2017 tax act. Read more: Phase 2 Tax Bill Outline Coming Next...
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