International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Thursday, December 27, 2018

Tax Reform Current Developments Dec 27, 2018

IRS Releases Proposed Regulations on 163(j) Interest Deduction Limits
The IRS has released proposed regulations on the limitations that the 2017 tax reform package placed on the business interest expense deduction. Included in the regulations is a new definition of "interest" that includes any expenses incurred to compensate for the use of money, or the time value of money--commitment fees, debt issuance costs, guaranteed payments and other "substitute" interest costs may all be considered "interest" under the new rules. The regulations also provide that the Section 163(j) limitation applies at the entity level with respect to partnerships and S corporations, and at the consolidated tax return level with respect to consolidated groups. For more information on the new limits on deducting business interest expenses, visit Tax Facts Online and Read More.

Other Important Tax Developments

Steps to Avoid Year-End RMD Problems. Required minimum distributions (RMDs) kick in when a plan participant reaches age 701/2, and while RMDs are broadly applicable, they frequently create problems. These problems are magnified when employers fail to educate and enforce RMD requirements, as well as because many employees are managing multiple accounts as they approach retirement. Because penalties for both plan sponsors and participants can be severe, participants, sponsors should provide ample notice of the RMD rules. Further, plans are permitted to implement rules providing that RMDs will automatically be distributed to employees who fail to respond to RMD notices. For more information on the RMD rules, visit Tax Facts on Insurance and Employee Benefits Online and Read More.

Tax Compliance | Permalink


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