United States

Transition Rules Are Critical for Corporate Taxpayers

Oct 09, 2017
From the Tax Governance Institute

Tax Reform Transitions Rules Are Critical for Corporate Tax Payers

By John Gimigliano, Principal in Charge, Federal Legislative & Regulatory Services, Washington National Tax, KPMG LLP

Read more Tracking Tax Reform blog posts

What's on our minds this week:

When we talk about tax reform, we usually think about the about the big shifts in policy. Substantial reductions in tax rates. Moving from a worldwide system to a territorial system. From MACRS depreciation to expensing. From full interest deductibility to limitations on interest.

Debate over these mega-items plays out in the public eye, and decisions to adopt or reject these proposals are usually made at the highest levels of Congress or the Administration.

But there’s another critical layer of tax reform being negotiated behind the scenes: crafting the transition rules between the current system and the new one for items such as expensing, repatriation, and interest deductibility, as well as a host of others.

Far from mere details, for many taxpayers, a transition rule could be the make-or-break factor between being a winner or a loser at the end of tax reform.

The bottom line: For some taxpayers, the transition rules to the new tax system could be as important as the new system itself. They are where taxpayers may have the most influence in shaping the new law, and it’s why they should be thinking about them carefully and engaging with policy makers.

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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG LLP.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

____________________

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG LLP.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.