Tax Reform Act:
What You Need to Know

An in-depth analysis of selected provisions of the major tax legislation enacted on December 22, 2017.

Stroock provides readers a deep-dive into various elements of the act, including changes to the estate and gift taxes, the treatment of compensation and carried interests, significantly reduced rates for corporate taxpayers and for many individual members of partnerships and LLCs, the elimination of all but $10,000 of the deduction for state and local income taxes and non-business real property taxes, the repeal of the corporate AMT, the end of accumulated built-up tax deferral for multinational corporations with foreign subsidiaries and new minimum taxes which tax significant portions of future deferrals, new limitations on the deductibility of interest by corporations and partnerships, and changes to the treatment of executive compensation.

To read our memos, please see below.  And check back often, we will address additional aspects of the legislation on a frequent basis.

Navigate to an area:  Tax  |  Executive Compensation & Employee Benefits  |  Personal Client Services
 
Tax
 
DATE BULLETIN TITLE ABSTRACT
1/8/2018 Tax:

Get Out The Backpacks: Carried Interests Must Be Carried For Longer
The Tax Reform Act changes the treatment of a so-called “carried interest.”  This Stroock bulletin addresses how this may affect the ability to recognize long-term capital gain on the disposition of such interest, or a disposition of the assets held by the entity with respect to which the carried interest is issued.
12/28/2017 Tax:

The Largest Tax Reform in 30 Years
On December 20, 2017, Congress passed the bill informally known as the “Tax Cuts and Jobs Act”, and on December 22, 2017, the president signed it into law as Public Law 115-97 (the “Tax Reform Act” or the “Act”). The final version of the law is based mostly on the previous Senate bill, but has many significant modifications.

In this Stroock Special Bulletin, we discuss certain significant provisions in the Tax Reform Act, and how they may impact individuals and businesses starting in 2018.
 
 
Executive Compensation & Employee Benefits          [Return to top]
 
DATE BULLETIN TITLE ABSTRACT
1/3/2018 Executive Compensation & Employee Benefits:

Enough to Get Exercised About? Tax Reform Offers Limited Deferral on Certain Private Company Equity Compensation
The Tax Cuts and Jobs Act contains a new provision, Section 83(i) of the Internal Revenue Code of 1986, as amended, that would allow eligible employees of certain private companies to elect to defer U.S. Federal income tax with respect to “qualified equity grants” for up to five years.  The change to the potential tax treatment of stock transferred upon exercise of a stock option or settlement of a restricted stock unit (“RSU”) applies to stock options exercised, or RSUs settled, after December 31, 2017.
 
In this Stroock Special Bulletin, we provide an overview of Section 83(i), and some of its implications for qualifying stock options.
12/22/2017 Executive Compensation & Employee Benefits:

ISO-lated No More?
The reconciliation of the House and Senate versions of the Tax Cut and Jobs Act, the sweeping tax reform bill overhauling the U.S. federal income tax code (the “Tax Reform  Act”), has been finalized and signed by the President. One of the features of the Tax Reform Act is the change in the thresholds considered for the alternative minimum tax or (“AMT”). The changes in the AMT may present opportunities for those who may wish to consider granting incentive stock options, or ISOs.

In this Stroock Special Bulletin, we provide a brief overview for consideration.
12/21/2017 Executive Compensation & Employee Benefits:

No Deduction for Good Performance?
The reconciliation of the House and Senate versions of the Tax Cut and Jobs Act, the sweeping tax reform bill overhauling the US federal income tax code (the “Tax Reform Bill”), has been finalized and is expected to be signed by the President imminently. The Tax Reform Bill (i) significantly expands the application of the Internal Revenue Code of 1986, as amended, Section 162(m) $1 million deduction limit, including by eliminating the exception for performance-based compensation and (ii) introduces a new 21 percent tax on certain compensation paid to executives of tax-exempt organizations.
 
In this Stroock Special Bulletin, we provide an overview of these changes, and other significant ways in which the Tax Reform Bill will impact executive compensation programs.
 
 
Personal Client Services          [Return to top]
 
DATE BULLETIN TITLE ABSTRACT
1/4/2018 Personal Client Services:

New Tax Law Provides Dramatic Estate, Gift and GST Tax Relief
Congress passed far-reaching changes to the Internal Revenue Code (the “2017 Tax Reform Act”) that provide significant estate planning opportunities to take advantage of a doubling of the estate, gift and generation-skipping transfer (“GST”) tax exemptions.  This doubling of the federal estate, gift and GST tax exemptions from $5,490,000 in 2017 to approximately $11,180,000 per person (and to approximately $22,360,000 for a married couple) as of January 1, 2018 creates both (1) a window of opportunity for gifting due to the significant expansion of federal gift and GST tax exemptions and (2) a need to review existing wills and other estate planning documents to ensure that they carry out planning objectives. 
 
In this Stroock Special Bulletin, we summarize the key provisions of the 2017 Tax Reform Act that pertain to estate, gift and GST taxes and the significant gifting opportunities that are now presented.
 

For more information:
 
Micah W. Bloomfield
Partner, Tax
212-806-6007
[email protected]
Mayer Greenberg
Partner, Tax
212-806-6286
[email protected]
Michelle M. Jewett
Partner, Tax
212-806-5835
[email protected]
Jeffrey D. Uffner
Partner, Tax
212-806-6001
[email protected]
Marissa J. Holob
Partner, Executive Compensation & Employee Benefits
212-806-5650
[email protected]
Steven W. Rabitz
Partner, Executive Compensation & Employee Benefits
212-806-6568
[email protected]
Kevin Matz
Partner, Personal Client Services
212-806-6076
[email protected]
Anita S. Rosenbloom
Partner, Personal Client Services
212-806-6026
[email protected]