Trump tax loophole accountants can and will take advantage of

Accountants are hard at work trying to qualify their clients for "pass through" busiesness loopholes in the newly-released Trump tax plan.
By Susan Konig | Feb 07, 2018
The tax law signed by President Donald Trump in December has tax planning professionals getting their creative juices flowing. Those who stand to benefit most affluent Americans who can afford advice from the nation's more ingenious accountants, tax lawyers and financial advisers.

The medium they're experimenting with: a"20 percent deduction for so-called "pass-through" businesses, whose income is taxed on firm-owners' personal reports.

The Internal Revenue Service (IRS) has yet to issue guidance on how to interpret the hastily passed law. But, this hasn't stopped tax pros from trying to devise strategies that will save their clients money while still standing up to scrutiny by the IRS and judges. Some pass-through owners may be instructed to group diverse businesses together to minimize their tax bills, while others may be told to split pieces off.

"I'm sure folks will try to push the edge of the envelope," said Mark Nash, a tax partner at PricewaterhouseCoopers LLP. "They always do."

Trump and Congressional Republicans have said middle-class Americans and small businesses will be the biggest beneficiaries under the $1.5 trillion tax cut. But the strategies under consideration to take advantage of the 20 percent pass-through deduction show how top earners could ultimately reap the biggest rewards.

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