| INDIVIDUAL |
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| Tax brackets |
- 12% on taxable income up to $45,000 (individuals)/$90,000 (households)
- 25% between $45,000/$90,000 and $200,000/$260,000
- 35% between $200,000/$260,000 and $500,000/$1 million
- 39.6% above $500,000/$1 million
- Benefit of 12% bracket phases out above $1 million/$1.2 million
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- 10% on taxable income up to $9,525/$19,050
- 12% between $9,525/$19,050 and $38,700/$77,400k
- 22% between $38,700/$77,400 and $70,000/$140,000
- 24% between $70,000/$140,000 and $160,000/$320,000
- 32% between $160,000/$320,000 and $200,000/$400,000
- 35% between $200,000/$400,000 and $500,000/$1 million
- 38.5% on taxable income above $500,000/$1 million
- All rates expire after 12/31/25
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| Standard deduction |
- Increased to $12,200/$24,400, indexed for inflation after 12/31/18
- Additional standard deduction for elderly and blind repealed
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- Increased to $12,000/$24,000, indexed for inflation after 12/31/18
- Additional standard deduction for the elderly and blind is maintained
- Expires after 12/31/25
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| Personal exemptions |
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- Repealed through 12/31/25
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| Alternative inflation measure |
- Switch from Consumer Price Index for All Urban Consumers (CPI-U) to "chained" CPI-U that considers consumer substitution for cheaper goods, beginning after 12/31/17
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| Child tax credit |
- $1,600 per child under the age of 17 not indexed, refundable up to $1,000 indexed to next $100
- $300 nonrefundable family credit for each parent and non-child dependent, not indexed, expires after 12/31/22
- Increases income threshold to $110,000/$230,000 above which credit phases out
- Refundable portion of credit disallowed for taxpayers without valid Social Security Number (SSN), if child does not have SSN, only eligible for $300 nonrefundable credit
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- $2,000 per child under the age of 18, not indexed, refundable up to $1,000, indexed to next $100
- Refundability threshold lowered to $2,500 in earned income
- $500 nonrefundable credt for non-child dependents
- Increased phaseout threshold to $500,000/$500,000
- Requires valid SSN for each child to claim refundable portion, otherwise eligible for $500 nonrefundable credit
- Expires after 12/31/25
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| Nonrefundable personal credits |
- Elderly and disabled credit and plug-in electric vehicle credit repealed
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No change |
| Education incentives |
- Hope credit, lifetime learning credit repealed
- Above-the-line deductions for student loan interest and qualified tuition expenses repealed
- American Opportunity Tax Credit allowed for fifth year at 50% of prior value (40% for refundable portion)
- Valid SSN to claim AOTC required
- No new contributions to Coverdell savings accounts, though 529 accounts may receive Coverdell rollovers
- Up to $10,000 annual 529 distributions for use in connection with public, private or religious elementary or secondary school, and 529 contributions for unborn children allowed
- Exclusions from taxable income for employer education assistance and qualified tuition reductiion repealed
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No change |
| Pease' limitation on itemized deductions, applicable to taxable income above $261,500/$313,800 (indexed) |
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- Repealed through 12/31/25
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| Mortgage interest deduction |
- Deductions for second home, home equity debt repealed
- Limit applicability to principal residence debt up to $500,000
- Acquisitions prior to 1/1/18 grandfathered, and refinancings prior to 11/2/17 are grandfathered to the extent the amount of the refinancing does not exceed amount of refinanced debt
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- Repeals deduction for home equity debt through 12/31/25
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| State and local deductions |
- Repealed except for property and sales taxes incurred in operating a trade or business, and for up to $10,000 in other property taxes (not indexed)
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- Repealed except for taxes incurred in operating a trade or business, through 12/31/25
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| Charitable deductions |
- Increases limit on cash contributions to qualified organizations from 50% to 60% of taxable income
- Allows adjustments to vehicle mileage rate in connection with providing volunteer services
- Denies deduction for purchases of college athletic seating rights
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- Same as House except no change to mileage rate and provisions expire after 12/31/25
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| Other deductions |
- Deductions for personal casualty and property losses (except for losses sustained in Hurricanes Harvey/Irma/Maria), tax prepation expenses, medical expenses that exceed 10% of adjusted gross income, alimony payments, moving expenses (except for members of the Armed Forces), and out-of-pocket educator expenses repealed
- Includes travel expenses within limit on deduction for wagering losses
- No new contributions to Archer Medical Savings Accounts
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- Same as House except deductions for all disaster-related personal casualty and property losses, as well as medical expense deduction, are maintained, and educator expense deduction is doubled to $500, through 12/31/25
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| Capital gains tax on home sales |
- Increases length of time to five of previous eight years taxpayer must own and live in home to qualify for full exclusion of first $250,000/$500,000 profit, otherwise exclusion is reduced
- Exclusion can only be used once every five years
- Exclusion amount phases out by $1 for every $1 of taxable income above $250,000/$500,000
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- Same as House except no phaseout of exclusion amount, and limitation expires after 12/31/25
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| Exclusions for certain employee fringe benefits |
- Exclusions for employee achievement awards, moving expenses and adoption assistance repealed
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- Exclusions for bicycle commuting reimbursements and moving expenses repealed, through 12/31/25
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| Dependent care Flexible Spending Accounts |
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No change |
| Retirement savings incentives |
- Recharacterization of Roth IRA contributions repealed
- Reduces minimum age for "in-service" distributions from governmental 457(b) plans to 59.5
- Modifies rules related to hardship withdrawals
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- Applies a single aggregate contribution limit for governmental 457(b) plans and employer-sponsored 401(k) or 403(b) plans for the Same as House employee
- Repeals recharacterization of Roth IRA contributions
- Increases limit on amount of public safety volunteer length-of-service awards from $3,000 to $6,000, indexed for inflation
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| Estate, gift and generation-skipping transfer taxes |
- Doubles estate and gift tax exemption after 12/31/17
- Repeals estate/GST tax after 12/31/24
- Reduces gift tax from 40% to 35% after 12/31/24
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- Doubles estate, gift and GST tax exemption after 12/31/17, through 12/31/25
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| Alternative Minimum Tax |
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- Repealed through 12/31/25
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| ACA "individual shared responsibility" payment |
No change |
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| BUSINESS |
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| Corporate tax rate |
- Reduced from 35% to 20%, effective after 12/31/17
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- Same as House except change is effective after 12/31/18
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| "Pass-through" businesses |
- Maximum 25% rate on qualified business income, other than income from personal services (e.g. law, accounting, engineering, financial advisory)
- Special rate applicable to 30% of business income, unless business owner elects to apply special capital percentage formula (must elect this formula for five years)
- Special 9% rate on first $75,000 of taxable income for all pass-through owners earning up to $150,000, above which the benefit is reduced until it fully phases out at $225,000 taxable income
- Special 9 percent rate is phased in over five years, with 11% in 2018-19, 10% in 2020-21, and 9% starting in 2022
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- 17.4% deduction of domestic non-service income, capped at 50% of taxpayer's total share of wages paid by the business
- Wage cap does not apply if taxable income does not exceed $250,000/$500,000
- Full deduction allowed for services-related income if taxable income does not exceed $250,000/$500,000, phased out over the next $50,000/$100,000
- Active pass-through losses disallowed in excess of $250,000/$500,000
- All provisions effective through 12/31/25
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| Corporate Alternative Minimum Tax |
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| Bonus depreciation |
- 100% expensing for qualified property acquired and placed in service and certain plants bearing fruits and nuts planted and grafted between 9/27/17 and 1/1/23 (or 1/1/24 for certain aircraft and longer production period property), applicable to used as well as new property
- Public utility and real estate property excluded
- Increases from $8,000 to $16,0000 the special depreciation allowance for luxury automobiles
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- Same as House except real estate property not excluded and used property is not eligible
- Also applicable to film, television and live theater production costs
- Maintains $8,000 special depreciation allowance for luxury automobiles, but increases depreciation allowances for taxpayers who do not elect full expensing (e.g. who may be in a loss position) for such vehicles
- Removes substantiation requirement for computers and peripheral equipment
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| Research and experimentation expenses |
- Five-year amortization generally required, except for R&E conducted outside the U.S. for which the applicable recovery period is 15 years
- Effective after 12/31/22
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- Same as House, except provision becomes effective after 12/31/25
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| Other cost recovery |
No change |
- Shortens recovery period for certain farming equipment from seven to five years and repeals 150% declining balance method
- Shortens recovery period from 39 years for nonresidential real property and 27.5 years for residential real property to 25 years for each
- Shortens shortens recovery period from 15 to 10 years for qualified leasehold, restaurant and retail improvements
- For residential rental property covered under the Alternative Depreciation System, normally required for property used outside the U.S., for tax-exempt use or financed by tax-exempt bonds, or for any property whose owner opts out of the net interest expense limitation, the 40-year recovery period is shortened to 30 years
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| Sec. 179 expensing limits |
- Increased to $5 million, with phaseout beginning at $20 million in total qualified property placed in service
- Expanded to include qualified energy efficient heating and air-conditioning property
- Expires 12/31/22
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- Increased to $1 million, with phaseout beginning at $20 million in total qualified property placed in service
- Expanded to include property used to furnish lodging and inprovements to nonresidential real property including roofs, heating, ventilation and air-conditioning property, fire protection and alarm systems, and security
systems
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| Small business accounting |
- Expands ability to use cash method of accounting to all businesses that meet a $25 million gross receipts test for the three prior taxable years
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- Same as House except the gross receipts limit is $15 million
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| Other accounting |
No change |
- Generally requires recognition of income in the taxable year in which such income appears in an applicable financial statement such as 10-K filings, with an exemption for certain long-term contracts
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| Interest expense deductions |
- Limits interest expense deductions to the sum of net interest income plus 30% of adjusted taxable income and any "floor plan financing" interest (common among auto dealers)
- Disallowed interest may be carried forward for up to five years
- Businesses that meet a three-year, $25 million gross receipts test are exempted, as are real estate businesses and regulated public utilities
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- Same as House except no exemption for floor plan financin;
- Disallowed interest may be carried forward indefinitely
- The gross receipts test is $15 million,
- Rural electric cooperatives are also exempt
- And farming businesses may opt out but must depreciate property over 10 or more years
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| Net operating loss deductions |
- Limited to 90% of taxable income, with unlimited carryovers permitted
- Carryovers are increased annually
- Special carryback provisions are repealed, other than one-year carryback for certain farm or small business losses
- Small businesses with no more than $5 million annual gross receipts are exempted
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- Limited to 90% of taxable income, declining to 80% after 12/31/22, with unlimited carryovers permitted, except for property and casualty insurance losses for which 20-year carryforwards are maintained
- Special carryback provisions are repealed, other than two-year carryback for certain farm or property and casualty insurance losses
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| Like-kind exchanges |
- Repealed other than for real property not held primarily for sale
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- Repealed other than for real property not held primarily for sale
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| Contributions to capital |
- Repeals exemption from gross income for contributions to corporations' capital, other than contributions of money or property in exchange for stock or other interests
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No change |
| Deduction for local lobbying expenses |
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| Sec. 199 domestic production deduction |
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| Employer-provided fringe benefits |
- Prohibits business deductions for entertainment expenses, membership dues, parking/transit benefits, on-premises athletic facilities, and food and beverages provided on-premises
- Existing 50% deduction limit on business meal expenses would remain
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- Same as House except deduction for on-premises athletic facilities would remain, and deduction for food and beverages provided on premises is limited to 50% prior to 12/31/2025, after which deduction would be disallowed
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| FDIC premiums |
- Deduction disallowed for financial institutions with greater than $50 billion in consolidated assets
- Limited for institutions with greater than $10 billion in assets
- Full deduction allowed for at or below $10 billion assets
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| Carried interest |
- Holding period for preferential long-term capital gains tax rate increased from one to three years for investment services providers
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| Partnership rules |
- Repeal of technical termination of partnerships
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- Tightens rules related to sale or exchange of partnership interests, clarifies that charitable contributions and foreign taxes are included in calculation of partners' loss limitations
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| Non-disclosure agreements in sexual abuse/harassment cases |
No change |
- Denial of deduction for any settlement, payout, or attorney fees related to sexual harrassment or sexual abuse if such payments are subject to nondisclosure agreement
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| Contingency fees |
- Denial of deduction for advances paid to clients
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| Orphan drug credit |
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- Cuts existing credit from 50% to 27.5%, requires disclosure of credit recipients
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| Employer-provided child care credit |
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No change |
| Historic rehabilitation credit |
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- Provides 20% credit over five years
- Repeals credit for pre-1936 property
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| Work Opportunity Tax Credit |
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No change |
| New Markets Tax Credit |
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No change |
| Credit for disabled employee access |
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No change |
| FICA tax credit for tipped workers |
- Increases threshold above which an employer can claim tip credit to $7.25/hr, in line with federal minimum wage in place for 2017
- Requires employer to allocate tip income among employees in excess of 10% of gross receipts above amounts reported by employees (up from 8% in current law)
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No change |
| Famly and medical leave credit |
No change |
- Provides credit equal to 12.5% of wages paid during period in which employees are on family or medical leave if payment rate is at least 50% of normal wages
- Credit is increased by 0.25 percentage points for each percentage point payment rate rises above 50%
- Expires after 12/31/19
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| Craft beverage excise taxes |
No change |
- Lowers tax rate on beer from $18 per barrel to $16 on first six million barrels produced or imported annually, with small brewers taxed at $3.50 per barrel on first 60,000 barrels produced domestically
- Removes 250,000 gallon domestic production limitation on wine excise tax credit, and makes sparkling wine producers and importers eligible, with a new tiered credit structure based on volume produced
- Allows higher alcohol content wine to qualify for lowest tier excise tax rate
- Reduced tax rate on mead and certain carbonated wines, and creates new tiered tax rate structure for distilled spirits
- All provisions expire after 12/31/19
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| Aircraft management services |
No change |
- Exempts certain payments by aircraft owners for maintenance and support services from air transportation excise taxes
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| Qualified Opportunity Zones |
No change |
- Creates deferral of income for capital gains reinvested in a "qualified opportunity fund" which invests in low-income communities
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| Alaska Native Corporations |
No change |
- Allows Alaska Native Corporations to transfer money to settlement trusts established "to promote the health, education and welfare of beneficiaries and to preserve the heritage and culture of Alaska Natives" without recognizing gross income and allowing an ANC to deduct contributions to a settlement trust
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| ENERGY |
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| Renewable electricity production tax credit |
- Eliminates inflation adjustment for facilities which begin construction after date of enactment
- Maximum credit is 1.5 cents per kilowatt hour
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No change |
| Renewable energy investment tax credit |
- Modified to include fiber optic solar, fuel cell, microturbine,
geothermal heat pump, small wind and combined heat and power property on same phase out schedule as existing ITC for solar energy property, through 2021
- 10% solar and geothermal ITC is repealed for new projects which begin construction after 2027
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No change |
| Residential energy-efficient property credit |
- Modified to include geothermal heat pump, small wind and fuel cell property on same phase out schedule as existing residential property credit (through 2021)
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No change |
| Enhanced oil recovery credit |
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No change |
| Marginal oil and gas well credit |
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No change |
| Nuclear production tax credit |
- Requires allocation of unused megawatt capacity by secretary of the Treasury
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No change |
| INFRASTRUCTURE |
|
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| Private activity bonds |
- Tax exemption repealed for new bonds issued after 12/31/17
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No change |
| Advance refunding bonds |
- Exclusion from gross income for interest on bonds issued to advance refund other bonds repealed for new issues after 12/31/17
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- Exclusion from gross income for interest on bonds issued to advance refund other bonds repealed for new issues after 12/31/17
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| Tax credit bonds |
- Authority to issue New Clean Renewable Energy Bonds, qualified energy conservation bonds, qualifed zone academy bonds and qualified school construction bonds would be repealed
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No change |
| Tax-exempt bonds for professional sports stadiums |
- Repealed for bonds issued after 11/2/17
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No change |
| INSURANCE |
|
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| Life insurance / property & Casualty insurance modifications |
- Includes 8% surtax on life insurance company income, modified discounting and proration rules for property and casualty insurance companies, repeals small life insurance company deduction, aligns accounting treatment of changes in computing life insurance reserves with accounting treatment for other corporations
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- Extends amortization period for certain policy acquisition expenses, such as commissions, from 120 to 600 months (60-month amortization of first $5 million in expenses remains in place), and increases percentages of acquisition policy expenses as a share of net premiums eligible for deduction
- Modified proration for rules for property and casualty insurance companies
- Aligns accounting treatment of changes in computing life insurance reserves with accounting treartment for other corporations
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| COMPENSATION |
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| Employee compensation |
- Eliminates exceptions for commissions and performanced-based compensation from $1 million annual deduction limit
- Expands definition of "covered employee" subject to deduction limitation
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- Eliminates exceptions for commissions and performanced-based compensation from $1 million annual deduction limit
- Expands definition of "covered employee" subject to deduction limitation
- With transition rule so that changes do not apply to written binding contracts in effect on 11/2/17 or modified in a material respect after that date
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| Tax-exempt organizations |
- 20% excise tax on compensation in excess of $1 million paid to five highest-paid employees
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| Equity grants |
- Gives employees option to defer inclusion in income of amounts attributable to stock transferred to the employee
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| INTERNATIONAL |
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| "Territorial" tax regime |
- 100% deduction for foreign-source dividends received by domestic
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| Sales or transfers of foreign assets in connection with transition to territorial system |
- Limitation on losses incurred upon sale or transfer of foreign branch assets corporations
|
- Same as House, with additional stipulations that sale of stock held in foreign corporations for one or more years as well as sales of stock in one foreign subsidiary by another foreign subsidiary are also covered by the limitation.
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| Treatment of deferred foreign income upon transition to territorial regime |
- One-time tax on post-1986 earnings and profits indefinitely reinvested abroad and not previously subject to U.S. tax
- Tax imposed at a 14% rate for liquid assets and 7% for illiquid assets
- Tax payment may spread over eight years in equal installments
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- Same as House except taxes are imposed at rates of 10% and 5%, respectively
|
| Modifications to "Subpart F" anti-deferral regime |
- Repeals inclusion of certain categories of foreign shipping and oil and gas-related income in Subpart F income
- "look through" rule for controlled foreign corporations made permanent
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| Anti-base erosion provisions |
- 10% tax on "foreign high return" income, defined as the excess above the federal short-term rate plus 7%, with the base amount reduced to take into account qualified business asset investment and interest expense
- Limits deductible net interest expense of a domestic corporation that is a member of a multinational group to 110% of its share of the worldwide group's net interest expense, with carryforwards of disallowed deductions for five years
- Beginning after 12/31/18, imposes 20% excise tax on payments by a domestic corporation to a foreign corporation that are allowed as a deduction or included in costs of goods sold, inventory or as a depreciable or amortizable asset
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- 10% tax on new category of "global intangible low-taxed income," defined as aggregate net income over a 10% return on controlled foreign corporation depreciable tangible property (tax rises to 12.5% beginning after 12/31/25)
- Limits deductible net interest expense of a domestic corporation that is a member of a multinational group to 110% of the domestic share of the worldwide group's total indebtedness based on its debt-equity ratio, with unlimited carryforwards allowed for disallowed deductions
- Imposes 10% tax (rises to 12.5% after 12/31/25) on deductible foreign payments from a U.S. corporation, not including cost of goods sold
- Restricts certain tax exemptions for foreign insurance, airline, shipping and cruise line income
- Increases excise tax on stock compensation of officers of an inverted corporation from 15% to 20%
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| "Patent box" prefential rate for foreign-derived income from U.S. intellectual property assets |
No change |
- Allows reduced rate of 12.5% on foreign-derived intangible income earned from a trade or business operating in the U.S., rising to 15.625% after 12/31/25
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| Special rule for IP transfers |
No change |
- Allows for tax-free IP transfers from a controlled foreign corporation to its U.S. parent
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| Domestic International Sales Corporation rules |
No change |
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| U.S. territories |
- Extends Sec. 199 deduction for Puerto Rico activies for one year, retroactive to 1/1/17
- Extends rum "cover over" increase for Puerto Rico and Virgin Islands, and American Samoa economic development credit through 12/31/22
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- Removes certain restrictions on the ability of U.S. citizens to claim residence in the U.S. Virgin Islands to benefit from the territory's economic development tax credits
- Aligns capital gains tax treatment for USVI residents with treatment of capital gains in Puerto Rico
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| TAX-EXEMPT ORGANIZATIONS |
|
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| Unrelated Business Income Tax |
- Clarifies that state and local pension plans are subject to UBIT
- Provides that UBIT exclusion for fundamental research only applies to research that is publicly available
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- Treats income from name and logo royalties as UBIT
- Prohibits losses from one unrelated trade or business from being used by a tax-exempt organization to offset gains by another unrelated trade or business
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| Excise taxes |
- Replaces two tiers of private foundation excise tax with a single tier at 1.4% on net investment income
- Require art museums to provide public access to qualify as a private operating foundation
- Impose 1.4% excise tax on net investment income of private colleges and universities with at least 500 students and assets equal to at least $250,000 per student
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- Same provision on college/university endowments, no change to private foundation excise tax or art museum/foundation status
- Repeals tax-exempt status for professional sports leagues
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| Political campaign activity |
- Repeals "Johnson Amendment" prohibition on tax-exempt organizations' support for political campaigns, without causing them to lose tax-exempt status
|
No change |