Tax Reform Update
Dec 14, 2017
As it stands today, the U.S. House and U.S. Senate have passed their own versions of tax reform legislation. Before a final bill can be sent to President Trump to sign into law, the House and Senate must meet in a conference committee and reconcile their differences. The House-Senate conference committee met yesterday, and it was announced that a final bill should be on the President's desk next week.
AAGD has worked closely with NAA throughout the legislative process, and we've communicated to our members of Congress in North Texas the importance of tax reform that encourages economic growth and investment in rental housing.
While the House and Senate versions of tax reform had some significant differences, we were pleased to see that both the House and Senate retained the deductability of business interest and the ability to conduct like-kind exchanges - both top priorities for the multifamily industry. However, several issues still need to be addressed in the final legislation - and we emphasized the need for these in our recent conversations with congressional offices.
Pass-Throughs - Adopt the House approach for a lower tax rate for pass-through entities or drop the Senate's wage limit on its deduction for pass-throughs;
Active Losses for Pass-Through Entities - Eliminate the Senate's limitation on active losses for pass-through entities;
Depreciation - Retain a 27.5-year depreciation period for multifamily buildings; and
LIHTC & Private Activity Bonds - Preserve funding for LIHTC and retain Private Activity Bonds
We will continue to monitor this issue and provide updates as soon as the final bill is released.