The Tax Cuts and Jobs Act was enacted in late December, 2017 and it significantly altered the tax laws applicable to individual taxpayers. The significant changes included: reduction in tax rates and modification of brackets, increase in the standard deduction, repeal of personal exemptions, limitation on deductions for state and local taxes, mortgage interest, home equity loan interest and elimination of deduction for miscellaneous itemized deductions. (more…)
With the signing of the Tax Cuts and Jobs Act (TCJA) in December 2017, valuation analysts have been tasked with incorporating the changes to the tax law into their analysis. Changes, such as the lowering of corporate tax rates and restrictions on interest deductibility, must be factored into valuation analysis to capture the effects of the TCJA on company value. When valuing a US company, valuation analysts must now consider the following: (more…)
The Tax Cuts and Jobs Act (TCJA), passed in December of 2017, was aimed at dissuading U.S. companies from moving profits offshore. However, it may make shifting earnings to tax havens more beneficial for some companies.
Before the TCJA, companies that offloaded profits linked to sales, research or production were taxed at a 35% rate when the profits were brought to the United States. The TCJA moved the U.S. to a “territorial” system, which was meant to reduce or eliminate the incentive for companies to invert to avoid U.S. taxes on foreign income. (more…)
The Tax Cuts and Jobs Act (TCJA) completely rewrites sections of the tax code for individuals and businesses. Under the TCJA, the federal gift and estate tax exemption doubles from $5 million to $10 million, indexed for inflation to $11.18 million in 2018.
Somewhat lost in the clamor is the fact that the new law preserves the “portability” provision for married couples. Portability allows your estate to elect to permit your surviving spouse to use any of your available estate tax exemption that is unused at your death. (more…)
On February 13, 2018, the Treasury Department and the Internal Revenue Service issued Rev. Proc. 2018-17, which provides modifications to the procedures for changing the accounting period of foreign corporations owned by U.S. shareholders that are subject to the transition tax under the Tax Cuts and Jobs Act. Rev. Proc. 2018-17 basically disallows the accounting period change if such change could result in the avoidance, reduction, or delay of the transition tax. (more…)
The Tax Cuts and Jobs Act (the Act), enacted on December 22, 2017, creates some interesting consequences when applying US GAAP principles for income tax accounting related to deferred taxes. FASB guidance requires that deferred income tax assets and liabilities be remeasured as a result of changes in tax laws or tax rates. As commonly known by now, the Act reduced the maximum tax rate for corporations to 21% from 35%. (more…)
As everyone knows by now, the U.S. tax system was widely altered on December 22, 2017 by enactment of the Tax Cuts and Jobs Act (the Act). The date of enactment is highlighted here because that is the date that triggers financial statement implications. Oh…so close to year-end for most companies. This timing situation is complicated because: (more…)
As you have been made aware from our series of webinars, e-mail updates and blog posts, President Trump signed the Tax Cuts and Jobs Act just in time for the new year and the Act includes new rules for the taxation of “qualified equity grants”. Internal Revenue Code Section 83(i) allows “eligible employees” to elect to defer taxation on the exercise of certain stock options or the settlement of restricted stock units for up to 5 years. Employees must make the election no later than 30 days after the employee’s rights in “qualified stock” are transferrable or vested. The election only defers income tax, the stock-based compensation received by the employee is still subject to employee and employer payroll taxes when vested. (more…)