Beruflich Dokumente
Kultur Dokumente
Business Provisions
Topic Previous Tax Law New Tax Law
Tax Rates
Cost Recovery
$3,160, $5,100, $3,050 & $1,875 for $10,000, $16,000, $9,600 & $5,760
Luxury auto depreciation limitations first, second, third & remaining for first, second, third & remaining
recovery years, respectively(5) recovery years, respectively(5)
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 2 of 24
Required use of inventories Gross receipts > $10 million Gross receipts > $25 million
Required application of §263A Gross receipts > $10 million for Gross receipts > $25 million for
uniform capitalization rules to property acquired for resale; no property acquired for resale or
inventory threshold for manufactured property manufactured property
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 3 of 24
Deduction for domestic production Up to 9 percent for domestic Repealed; effective for taxable years
activities production activities beginning after 12/31/2017
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 4 of 24
Bond Reforms
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 5 of 24
Compensation
Other Provisions
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 6 of 24
Charitable contribution deduction for Determined according to rules Determined according to rules
ESBTs generally applicable to trusts generally applicable to individuals
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 7 of 24
Deferral/permanent exclusion of
capital gains reinvested in a
corporation or partnership that
invests at least 90 percent of its
Qualified opportunity zones Not addressed assets in qualified opportunity zone
property, which are targeted at
certain low-income community
population census tracts to be
established in each state
Passive income does not include Passive income does not include
income from a corporation income from a corporation with
PFIC insurance business exception
predominantly engaged in an insurance liabilities constituting more
insurance business than 25 percent of its total assets
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 8 of 24
1. Prior-year minimum tax credit is refundable in an amount equal to 50 percent of excess of credit for tax
year over amount of credit allowable for year against regular tax liability for 2018 to 2020 (100 percent
for 2021).
2. Deduction is 100 percent of dividend received where member of the same affiliated group.
3. Deduction does not apply to specified service businesses, except in case of taxpayer whose taxable
income does not exceed $157,500 for single filers ($315,000 married filing jointly (MFJ)) with a phaseout
beginning at the same levels over the next $50,000 ($100,000) of taxable income. QBI is all domestic
business income other than investment income (except income from publicly traded partnerships
that’s eligible for inclusion), investment interest income (other than qualified real estate investment
trust and corporate dividends), net capital gain, foreign currency gains, etc. The deduction is limited to
the greater of 50 percent of W-2 wages paid with respect to the business or 25 percent of W-2 wages
paid plus 2.5 percent of the unadjusted basis of all qualified property.
4. Definition of qualified property expanded by removing requirement that original use begin with
taxpayer. Excludes certain property used in regulated public utility businesses and property used in a
trade or business that has floor plan financing indebtedness; includes qualified film, television and live
theatrical productions.
5. Amounts adjusted for inflation annually. Additional $8,000 allowed for assets qualifying for bonus
depreciation; phased down in 2018 and 2019 to $6,400 and $4,800, respectively, for automobiles
acquired before September 28, 2017, but placed in service after September 27, 2017.
6. Five-year recovery period does not apply to grain bins, cotton ginning assets, fences or any other land
improvement. Original use must commence with the taxpayer. A 150 percent declining balance method
will continue to apply to any 15- or 20-year farm property to which the straight-line method does not
apply.
7. Definition of qualified property expanded to include certain improvements to nonresidential real
property, including roofs, HVAC systems, fire protection and alarm systems and security systems.
8. Adjusted taxable income is calculated without regard to items not properly allocable to a trade or
business, any business interest expense or business interest income, the 20 percent pass-through
income deduction, floor plan financing interest, any NOL deduction and, for taxable years beginning
before January 1, 2022, any deduction for depreciation, amortization or depletion. The interest
deduction is not limited for any taxpayer with average annual gross receipts for the preceding three
taxable years of $25 million or less or a regulated public utility business (including electric
cooperatives). Real property trade or businesses described in IRC §469(c)(7)(C) may elect to not be
subject to the limitation provided they make an irrevocable election and use the alternative
depreciation system (ADS) for any of its non-residential real property, residential real property and
qualified improvement property. Farming businesses may also elect not to be subject to the limitation
provided they use the ADS method to depreciate farming property with a recovery period of 10 years or
more. Electing farming businesses specifically include agricultural and horticultural cooperatives.
9. NOLs for any tax year are generally excess of life insurance deductions over life insurance gross
income for that year. Deduction is limited to 80 percent of the excess and can be carried forward
indefinitely (no carryback).
10. Includes entertainment, amusement or recreation activities; does not include qualified meal expenses.
11. No deduction allowed for taxpayers with total consolidated assets of $50 billion or more. For taxpayers
with consolidated assets between $10 billion and $50 billion, disallowed deduction calculated based on
ratio of the excess of total consolidated assets exceeding $10 billion to $40 billion.
12. For tax periods beginning after December 31, 2021, certain research and experimentation expenditures,
including software development costs but excluding land acquisition and improvement costs and mine
(including oil and gas) exploration costs, would be required to be capitalized and amortized over a five-
year period. For foreign research projects, this amortization period increases to 15 years. Upon
retirement, abandonment or disposition of property, any remaining basis would continue to be
amortized over remaining amortization period.
13. Requires the use of straight-line depreciation or the ADS method.
14. Credit increased by 0.25 percentage points (but not above 25 percent) for each percentage point by
which rate of payment exceeds 50 percent. Credit is effective for wages paid in tax years beginning
after December 31, 2017, and before tax years beginning after December 31, 2019.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 9 of 24
15. Would not apply to any remuneration under written binding contracts in effect on November 2, 2017,
that isn’t modified in any material respect; renewals are considered material modifications.
16. Qualified employees exclude any individual who, with respect to the employer corporation, (1) was a 1
percent owner at any time during the 10 preceding calendar years, (2) has ever held the position of
CEO or CFO, (3) is a family member of an individual described in (1) or (2), or (4) was one of the four
highest compensated officers for any of the 10 preceding taxable years.
17. Stock must be received from a nonpublicly traded corporation in connection with the exercise of an
option or in settlement of a restricted stock unit granted in connection with the performance of
services.
18. In determining whether the asset use or business activities test are met, due regard is given to whether
such assets, income, gain or loss were accounted for through such trade or business. The extent to
which the income, gain or loss is derived from assets used in or held for use in the conduct of the U.S.
trade or business and whether the activities of the trade or business were a material factor in the
realization of the income, gain or loss is considered.
19. Small brewers are defined as brewers producing fewer than 2 million barrels of beer during a calendar
year.
20. 100 percent of foreign-sourced portion of dividends paid by foreign corporation to U.S. corporate
shareholder owning 10 percent or more of foreign corporation’s stock exempt from U.S. taxation. No
foreign tax credit or deduction allowed for any foreign taxes paid or accrued with respect to any
exempt dividend. The new law also includes provisions relating to deductions for disqualified related-
party amounts paid or accrued pursuant to a hybrid transaction between a hybrid entity and an
expanded definition of intangible property.
21. Provides an election to preserve NOLs and coordinate NOL, overall foreign loss and foreign tax credit
carryforward rules upon transition.
22. “Downward attribution” provides that certain stock of a foreign corporation owned by a foreign person
is attributed to a related U.S. person for purposes of determining whether the related U.S. person is a
U.S. shareholder of the foreign corporation.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 10 of 24
Individual Provisions
Topic Previous Tax Law New Tax Law
Seven brackets with top rate of 39.6 Seven brackets with top rate of 37
Individual rates on ordinary income(1)
percent* percent*^
$6,500 for single filers, $9,550 head $12,000 for single filers, $18,000
Standard deduction
of household & $13,000 MFJ head of household & $24,000 MFJ(2)
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 11 of 24
Deduction for: (1) state, local & Deduction limited to $10,000 for the
State & local taxes paid or accrued foreign real property taxes, (2) state aggregate of: (1) state & local real &
not in connection with a trade or & local personal property taxes & (3) personal property taxes & (2) state &
business state & local income taxes (or state & local income tax (or state & local
local sales tax paid, if higher) sales tax paid, if higher)(2)
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 12 of 24
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 13 of 24
Other Provisions
The IRS has nine months to return Extends period of time IRS has to
the monetary proceeds from the sale return monetary proceeds to two
of wrongfully levied property; an years; also extends the time period
Contesting IRS levy
action for wrongful levy must be for bringing a civil action for wrongful
brought within nine months from the levy to two years(8)
levy date
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 14 of 24
* Plus 3.8 percent net investment income tax on unearned income when modified adjusted gross
income exceeds $200,000 for single filers ($250,000 married filing jointly (MFJ)).
^ Expires after December 31, 2025, except amounts would continue to be indexed for inflation using
chained measurement of the consumer price index where applicable.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 15 of 24
General Provisions
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 16 of 24
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 17 of 24
1. Deduction is 100 percent of dividend received where member of the same affiliated group.
2. Definition of qualified property expanded by removing requirement that original use begin with
taxpayer.
3. Definition of qualified property expanded to include certain improvements to nonresidential real
property, including roofs, HVAC systems, fire protection and alarm systems and security systems.
4. Adjusted taxable income is without regard to items not properly allocable to a trade or business, any
business interest expense or business interest income, the 20 percent pass-through income deduction,
floor plan financing interest, any NOL deduction and, for taxable years beginning before January 1,
2022, any deduction for depreciation, amortization or depletion. Interest deduction not limited for any
taxpayer who meets a $25 million gross receipts test, is a regulated public utility business (including
electric cooperatives) or a real property business. Farming businesses may elect not to be subject to
limitation provided they use ADS method to depreciate farming property with recovery period of 10
years or more. Electing farming businesses specifically include agricultural and horticultural
cooperatives.
5. NOLs for any tax year are generally excess of life insurance deductions over life insurance gross
income for that year. Deduction is limited to 80 percent of the excess and can be carried forward
indefinitely (no carryback).
6. Loss payment pattern computed based upon assumption that all losses are paid (1) in general, during
the accident year and the three calendar years following the accident year, or (2) in the case of lines of
business relating to auto or other liability, medical malpractice, workers’ compensation, multiple peril
lines, international coverage and reinsurance, during the accident year and 10 calendar years following
the accident year. For long-tail lines of business, a special rule extends the loss payment pattern
period, so the amount of losses that would have been treated as paid in the tenth year after the
accident year is treated as paid in the tenth year and in each subsequent year (up to five years) in an
amount equal to the amount of the losses treated as paid in the ninth year after the accident year.
7. Amount of losses that would have been treated as paid in the third year after the accident year treated
as paid in third year and in each subsequent year in an amount equal to the average of the amount of
the losses treated as paid in the first and second years after the accident year, and in the case of lines
of business relating to auto or other liability, medical malpractice, workers’ compensation, multiple
peril lines, international coverage and reinsurance, the amount of losses that would have been treated
as paid in the tenth year after the accident year would be treated as paid in the tenth year and in each
subsequent year in an amount equal to the average of the amount of the losses treated as paid in the
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 18 of 24
seventh, eighth and ninth years after the accident year; would result in a lower tax deduction for
reserves.
8. Companies that make this election are required to make a special estimated tax payment equal to the
tax benefit attributable to the deduction. Amounts added to the special loss discount account are
automatically subtracted from the account and made subject to tax if they have not already been
subtracted after 15 years.
9. Tax rules for insurance companies enacted in 1959 included a rule that half of a life insurer’s operating
income was taxed only when the company distributed it, and a PSA kept track of untaxed income. In
1984, this deferral of taxable income was repealed, although existing policyholders’ surplus account
balances remained untaxed until they were distributed. Legislation enacted in 2004 provided a two-year
holiday that permitted tax-free distributions of these balances during 2005 and 2006.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 19 of 24
Individual Brackets
Single
2018 Ordinary Rates 2018 Capital Gains Rates
Bracket Previous Tax Law* New Tax Law*^ Previous Tax Law* New Tax Law*^
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 20 of 24
Head of Household
2018 Ordinary Rates 2018 Capital Gains Rates
Bracket Previous Tax Law* New Tax Law*^ Previous Tax Law* New Tax Law*^
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 21 of 24
Bracket Previous Tax Law* New Tax Law*^ Previous Tax Law* New Tax Law*^
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 22 of 24
Bracket Previous Tax Law* New Tax Law*^ Previous Tax Law* New Tax Law*^
* Plus 3.8 percent net investment income tax on unearned income when modified adjusted gross
income exceeds $200,000 for single filers ($250,000 MFJ). Bracket income levels would be inflation
adjusted based on a chained measurement of the Consumer Price Index.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 23 of 24
Transfer Provisions
Topic Previous Tax Law New Tax Law
40 percent tax rate with $5.6 million 40 percent rate with inflation adjusted
Estate tax basic exclusion amount per taxpayer $10 million basic exclusion amount
(1)
per taxpayer^(1)
40 percent rate with $5.6 million 40 percent rate with basic exclusion
Gift tax basic exclusion amount per taxpayer amount per person(1); $15,000 annual
(1)
; $15,000 annual exclusion(2) exclusion retained^(2)
^ Expires after December 31, 2025, except amounts would continue to be indexed for inflation using
chained measurement of the consumer price index where applicable.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018
Print Tax Reform Resources Page 24 of 24
1. Applies to institutions with 500 or more tuition-paying students and assets with a value of at least
$500,000 per full-time student, not including those used directly in carrying out the institution’s
educational purpose. Assets and related net investment income of related organizations would be
treated as part of the private college or university. Only applies to institutions with more than 50
percent of their tutition-paying students located within the United States.
http://www.bkd.com/services/tax-reform-resources-print.htm 2/23/2018