Tax Reform and Partnerships: What CPAs Need to Know Now About Massive Changes in 2018

Changes in Pass-Through Rate, Active Loss Limitations and More in the New Tax Reform Law

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, February 7, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide partnership tax advisers and compliance professionals with a critical first look at the practical impact of the new tax overhaul/reform legislation passed by Congress in December 2017 on partnerships and LLCs. The panel will detail the specific changes the new law makes to pass-through income tax rates, carried interest and loss limitation provisions, discuss the impact of other general business tax provision changes on partnership entities, and offer concrete guidance on what steps partnership tax advisers and preparers should take now to achieve beneficial tax results and avoid potential pitfalls.

Description

The tax reform act represents the most sweeping change to the U.S. income tax code in over 30 years. The impact on business entities set up as partnerships will be particularly acute, with changes to rates, deductions and loss allowances for most pass-through entities. For tax advisers and compliance professionals serving partnerships, the new law creates both significant opportunities and challenges.

The law alters the treatment of partnership pass-through income. The Act provides a 20% deduction rate on qualified income from a partnership, subject to wage limitations. Most professional service partnerships, such as attorneys and accountants, are not eligible to claim the deduction. The Act also imposes an active loss limitation on partnerships for the first time, and extends the hold period on carried interest from one year to three years.

In addition to the provisions specific to pass-through entities, the Act makes several changes that will impact many partnership businesses. The new law eliminates NOL carry-backs but extends the carry-forward period indefinitely. It also limits business interest deduction amounts and restricts tax gain deferral under Section 1031 to exchanges of real property only.

Listen as our experienced panel provides a critical first look at the partnership and LLC implications of the tax reform law, enabling tax advisers to get a grasp on the impact of the new law on partnership clients.

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Outline

  1. Partnership and pass-through provisions and changes in new tax law
    1. New deduction on qualified business income
    2. Active loss limitations
    3. Extension of hold period on carried interest to three years
  2. Mechanics of new qualified business income deduction for pass-through entities
    1. W-2 wage test
    2. Separate business line determinations
    3. Determined at owner level
    4. Eligible pass-through income
  3. Other business provisions and changes that will impact partnerships and LLCs
    1. Business interest deduction limitation
    2. Changes to deferral treatment of like-kind exchanges
    3. Elimination of NOL carry-back and extension of carry-forward period
  4. Planning steps in light of a Dec. 31, 2025, sunset provision

Benefits

The panel will address these and other important questions:

  • How the 20% deduction for qualified business pass-through income works
  • Critical provisions and changes in the new tax reform law for partnerships and LLCs
  • How changes to other business tax provisions will impact partnerships and other pass-through entities
  • Planning considerations in light of Dec. 31, 2025, sunset provision

Faculty

Barnett, Robert
Robert S. Barnett

Partner
Capell Barnett Matalon & Schoenfeld

Mr. Barnett practice encompasses business and tax planning, estate planning and federal and state tax dispute...  |  Read More

Lovett, Brian
Brian T. Lovett, CPA, JD

Partner
WithumSmith+Brown

Mr. Lovett has extensive experience serving the tax needs of both public companies and closely-held businesses,...  |  Read More

Ghiasvand, Sepi
Sepi Ghiasvand

Of Counsel
Hopkins & Carley

Ms. Ghiasvand has experience serving as general corporate counsel to domestic and international, emerging and...  |  Read More

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