tax reform - The S Corporation Association

Trump To Weigh In On Taxes

So what do we know about the Administration’s tax announcement scheduled for tomorrow? First, we expect the announcement will be limited to principles and a couple key proposals – not a full blown tax reform plan.

Second, the emphasis appears to be on cutting tax rates. We expect something similar to the Trump campaign’s proposal setting the top rates at 33 percent for families and 15 percent for businesses.

Finally, there is likely to be a call for territorial tax treatment coupled with some commentary on the need for leveling the international tax playing field. We could see the term “reciprocal taxes” …

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admin2019-01-31T22:50:18+00:00April 25, 2017|

Brady Plan and Pass Throughs

The Wall Street Journal featured S-Corp Board member Clarene Law last week in a story focused on the new tax rates for pass through businesses in the House tax reform plan. As the story notes:

Clarene Law said a lower tax rate on pass-throughs would free up capital to add rooms to her hotels in Jackson, Wyo. or buy new air conditioners and washing machines.

“25% if it’s pure, not all cobbled up with a bunch of surtaxes, it would be a great benefit,” said Ms. Law, chief executive officer of Elk Country Motels Inc. Her businesses own more than 400 …

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admin2021-08-16T14:02:40+00:00March 17, 2017|

More on the Valuation Rules

The August recess has given the S-Corp team a little more time to review the pending valuations rules out of Treasury. Recall that 23 years after the IRS surrendered and stopped using their flawed “family attribution” approach to valuing family-owned businesses, Treasury is trying to resurrect the concept using Section 2704. Below are some additional thoughts about why this is a particularly bad and fatally flawed idea.

Scope: Eliminating the application of “lack of control” and possibly “lack of marketability” discounts – the rule is unclear on those — to family business valuations may sound technical and immaterial, but …

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admin2019-02-01T19:49:55+00:00August 30, 2016|

House Tax Blueprint

You have to feel for the House tax writers. They spent months putting together a plan to reform the tax code and now all anybody wants to talk about is Brexit and Section 385. That’s too bad, because the plan outline released last week is pretty good.

You can read the whole outline here, plus there’s been lots of discussion among the tax experts on how it would help to simplify tax collections while encouraging more business investment and job creation:

Tax Foundation: “Details of the House GOP Tax Plan”
Tax Policy Center: “Ryan Proposes Big Tax Cuts …

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admin2019-02-01T19:56:24+00:00June 28, 2016|

Senate Finance Hearing on Corporate Integration

Remember the pass-through mantra for tax reform? All business income should be taxed once, it should be taxed at the same top rate, and then we should leave it alone! Well, that mantra was on display Tuesday when a panel of tax experts explored the benefits and costs of corporate integration. Here’s Dr. Michael Graetz:

“In the 1990s, principally because of its administrative advantages, the Treasury Department recommended taxing business income once—at the business level. This form of integration was advanced by President George W. Bush in 2003, but Congress instead simply lowered shareholders’ income tax rates on dividends. That …

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admin2019-02-01T19:56:24+00:00May 19, 2016|