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Monthly Archives: April 2017

Trump Also Proposes 15% Tax Rate For Pass-Through Entities, One Time Repatriation Tax & Switch To a Territorial Tax System

April 27, 2017

On April 26, 2017 we posted Trump Proposes 15% Corp. Tax Rate & Repeal of 3.8% Obama Tax where we discussed that 15 percent tax rate for corporations, cutting the top individual tax rate from 39.6% to 35%, reducing the number of rates from seven to three and the repeal of a 3.8 percent tax on net investment income are the top priorities in the Trump administration’s tax reform agenda, according to a plan released by the White House today April 26, 2017

On April 27, 2017 we posted Trump Proposes To Repeal Estate Tax, Alt Min Tax and 3.8% Obama Tax where we discussed that it also provides for repeal of:

  1. the Estate Tax
  2. the Alternative Minimum Tax along will
  3. the 3.8 per cent Surtax on investment income (capital gains, interest and dividends) introduced by the Obama administration to fund the Affordable Care Act.
The president's plan also proposes in addition to slashing the top corporate tax rate to 15 percent from 35 percent the following: 

1. 15% Corporate Tax Rate For Pass-Through Businesses
The 15 percent corporate rate would also apply to profits of pass-through businesses, such as S Corporations and LLCs, whose profits currently flow through to individual taxpayers and are taxed at a current rate as high as 39.6 percent.   
2. One-Time Tax on Repatriated Overseas Profits 
A new, one-time tax on the repatriation of previously untaxed overseas profits at a to-be-determined rate, which might be as low as 10 percent or even 3.5 percent, as proposed by certain congressional leaders.  

3 . Conversion From a World Wide Tax System to Territorial Tax System
To convert from the current system of taxation on worldwide profits to a territorial-tax system in which foreign profits are not taxed until repatriated back to the US.

But also see our April /25/17 post Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?  where we discuss that there may not be enough time to get the tax bill passed in 2017. Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. 

 

 

Have a Tax Problem?
 

Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at 
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid (888 882-9243).
 

  

Read more at: Tax Times blog

Trump Proposes To Repeal Estate Tax, Alt Min Tax and 3.8% Obama Tax

April 27, 2017

On April 26, 2017 we posted Trump Proposes 15% Corp. Tax Rate & Repeal of 3.8% Obama Tax where we discussed a 15 percent tax rate for corporations, cutting the top individual tax rate from 39.6% to 35%, reducing the number of rates from seven to three and the repeal of a 3.8 percent tax on net investment income are the top priorities in the Trump administration’s tax reform agenda, according to a plan released by the White House today April 26, 2017.

Upon closer reading it also provides for repeal of the Estate Tax and the Alternative Minimum Tax along will the repeal of the 3.8 per cent Surtax on investment income (capital gains, interest and dividends) introduced by the Obama administration to fund the Affordable Care Act. This will return the top capital gains tax rate and dividend rate to 20 per cent.

But also see our April /25/17 post Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?  where we discuss that there may not be enough time to get the tax bill passed in 2017. Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. 

 

Have a Tax Problem?
 

Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at 
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid (888 882-9243).
 

Read more at: Tax Times blog

Trump Proposes 15% Corp. Tax Rate & Repeal of 3.8% Obama Tax

April 26, 2017

A 15 percent tax rate for corporations, cutting the top individual tax rate from 39.6% to 35%, reducing the number of rates from seven to three and the repeal of a 3.8 percent tax on net investment income are the top priorities in the Trump administration’s tax reform agenda, according to a plan released by the White House today April 26, 2017.

Treasury Secretary Steven Mnuchin and National Economic Director Gary Cohn confirmed rumors that President Donald Trump is sticking to priorities outlined during this election campaign to slash the current 35 percent corporate tax rate by 20 percentage points.

“We will have a massive tax cut for business and massive tax reform and simplification,” Mnuchin said. “The president is determined to unleash economic growth for businesses."

Another significant change that the White House is proposing is a shift to a territorial tax system under which income earned abroad would not be taxed within the U.S. Under the current worldwide system, U.S. corporations are required to pay taxes on all income, regardless of where it is earned.



Mnuchin and Cohn also reiterated Trump’s campaign wish list to allow for a Repatriation of Corporate Income Stored Overseas.

The standard deduction will be doubled to benefit the middle class. However, this benefit would be greatly diminished if it is accompanied by the elimination of certain personal tax exemptions as well, as it was in Trump’s tax package released on the campaign trail.
 
Trump’s plan is silent on the controversial border adjusted tax proposal floated by the House Republicans that is expected to raise approximately $1.2 trillion in revenue by disallowing deductions for import expenses. The BAT has been staunchly opposed by import-heavy retailers and Trump has waffled on the idea in the past few months, labeling it as too complicated.
Democrats are opposed to such significant tax cuts that they say will benefit the wealthiest at the expense of lower-income people, and so, any tax reform bill introduced in Congress will have to be revenue-neutral without raising deficits beyond a 10-year window so that it can satisfy a Senate rule allowing certain measures to pass with a bare majority.
Senate Democratic Leader Chuck Schumer, D-N.Y., said in a statement that Democrats will oppose any proposal from the president that gives massive tax breaks to “the very wealthy” while exploding the deficit.
The White House administration has said that the tax cuts would be paid for through economic growth, but the Tax Foundation, a nonpartisan, right-leaning think tank, has said that cutting the corporate income tax rate to 15 percent alone would reduce federal revenues by about $2 trillion over a decade and the economy would have to grow by an unrealistic 5 percent.
But also see our April /25/17 post Tax Reform Announcement Coming on April 24 but Tax Reform Is 'Impossible' This Year - So Where Does That Leave Tax Advisers?  where we discuss that there may not be enough time to get the tax bill passed in 2017. Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. 

 


Have a Tax Problem?
 

Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at 
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid (888 882-9243).
 

Sources:

CNN

The New York Times

Law360

 

Read more at: Tax Times blog

IRS Adds Belgium, Columbia & Portugal to Automatic Information Exchange List

April 25, 2017

Rev. Proc. 207-31 updates Rev. Proc. 2016-56 (published in December 2016) to adds 3 countries:

  • Belgium,
  • Colombia, and
  • Portugal

to the Section 4 list of countries with which the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have determined that it is appropriate to have an Automatic Exchange of information collected under §§ 1.6049-4(b)(5) and 1.6049-8(a).

Have a Tax Problem?

 

Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at 
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888-8TaxAid (888 882-9243).
 

  

 
 
 
 

 

 

Read more at: Tax Times blog

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