The 2017/2018 Trump/GOP tax plan

[D_Anconia]

@AI_Proofreader

In the universe where that money was made available to you by keeping it out of the treasury, where it could have helped 9 million kids in working families with wages too low to afford health insurance. Some of whom will die.And also, you’re the employer who refuses to raise wages so those kids’ parents can afford health insurance. Or offer it as a benefit to them, for working for you. Even though you suddenly have way more money than you did the year before.

You know… this universe.

Still not hoarding.

Won’t someone think of the children is hardly an original argument, btw.

[jasg]

@AI_Proofreader

Well, how else are we going to maintain the worst income inequality since the fall of the Roman Empire?
C’mon, we have a reputation to maintain here.

If we don’t get to work on our infrastructure, the future will make fun of the ruins we leave behind…

[AI_Proofreader]

@jasg

If we don’t get to work on our infrastructure, the future will make fun of the ruins we leave behind…

At least the Roman aqueducts looked nifty while they were poisoning everyone with lead. Our 3,000 cities with dangerous amounts of lead in the drinking water just deliver them in boring tubes buried underground.

And our collapsed bridges won’t even have any gold-plated railings. Sad!

[Alley_Dweller]

@jasg

In the MPSIMS thread, Bone quoted the following section from the bill regarding limitations on deductibility of other taxes.

I have a question for tax attorney types.

Do lines 6-7 and lines 15-20 mean, for example, if I own a vacation home or a golf course in Scotland, I can fully deduct real estate taxes on that property (instead of limiting the deduction to $10,000)?

Here are links to the tax code being changed:

26 U.S. Code § 164 - Taxes | U.S. Code | US Law | LII / Legal Information Institute
26 U.S. Code § 212 - Expenses for production of income | U.S. Code | US Law | LII / Legal Information Institute

The conference committee report explains what the intention is:

Conference Agreement
The conference agreement provides that in the case of an individual,171 as a general
matter, State, local, and foreign property taxes and State and local sales taxes are allowed as a
deduction only when paid or accrued in carrying on a trade or business, or an activity described
in section 212 (relating to expenses for the production of income).172 Thus, the provision allows
only those deductions for State, local, and foreign property taxes, and sales taxes, that are
presently deductible in computing income on an individual’s Schedule C, Schedule E, or
Schedule F on such individual’s tax return. Thus, for instance, in the case of property taxes, an
individual may deduct such items only if these taxes were imposed on business assets (such as
residential rental property).

Under the provision, in the case of an individual, State and local income, war profits, and
excess profits taxes are not allowable as a deduction.

The provision contains an exception to the above-stated rule. Under the provision a
taxpayer may claim an itemized deduction of up to $10,000 ($5,000 for married taxpayer filing a
separate return) for the aggregate of (i) State and local property taxes not paid or accrued in
carrying on a trade or business, or an activity described in section 212, and (ii) State and local
income, war profits, and excess profits taxes (or sales taxes in lieu of income, etc. taxes) paid or
accrued in the taxable year. Foreign real property taxes may not be deducted under this
exception.

Or to summarize: An individual may claim a foreign property tax deduction on a business property, not a personal property. Deductions for property taxes on business properties are in addition to the $10,000 limit.

[Alley_Dweller]

@jasg

Since that calls out “State or local income taxes” wouldn’t that mean property taxes are ok?

We can definitely say that this section of the bill does not prohibit the deduction of property taxes.

I think it is safe to say that there is consensus that payment in 2017 of property taxes for the year 2017, even if the due date is in 2018, is deductible in 2017. There is also consensus that if the taxing authority treats the payment as a “deposit” rather than as a payment of tax, it is not.

However, there is dispute whether under the old law prepayment of taxes for future years (i.e., taxes that have not yet been imposed) is deductible. There is a surprising lack of authority on the matter. There is a vocal group of alarmists that point to rulings on similar topics and say “don’t do it.” Most others believe that it probably is all right.

[ElvisL1ves]

@D_Anconia

No, but again, it’s not hoarding.

Buying back stock raises the price, making ownership and options worth more for those who have it. It does not invest in people or technology or anything else that makes a company or the economy grow; it’s just a way to transfer corporate revenue into private pockets.

[jasg]

@Alley_Dweller

The conference committee report explains what the intention is:

Or to summarize: An individual may claim a foreign property tax deduction on a business property, not a personal property. Deductions for property taxes on business properties are in addition to the $10,000 limit.

Thanks. I guess it is fortunate that the authors of the new bill were careful to make sure some people still save bigly if they own a golf course is Scotland.

[John_Mace]

I was going to start a thread about these 2 things in IMHO, but I think it might be better to just ask here as there might be a simple answer to both:

1. Has anyone taken a stab at estimating how many people will itemize deductions under the new plan? I think we’re at about 35% now, and I’m expecting that number to shrink quite a bit, but I don’t know how much. Will it drop to 20%? Lower?

2. Is there a good web site to see a comparison of the compromise plan they will vote on next week and the current tax code? I’ve got the Sunday NYT sitting on my front porch right now, and I assume there will be something there, but I’m away for the weekend won’t be home until tomorrow.

[elucidator]

Better not wait, read it right away! The Times, they are a changin’…

[John_Mace]

@elucidator

Better not wait, read it right away! The Times, they are a changin’…

I’m just hoping a hard rain doesn’t fall and ruin it before I get home.

Actually, the rain gods can have my newspaper. We need rain!!

[jasg]

@John_Mace

I was going to start a thread about these 2 things in IMHO, but I think it might be better to just ask here as there might be a simple answer to both:

1. Has anyone taken a stab at estimating how many people will itemize deductions under the new plan? I think we’re at about 35% now, and I’m expecting that number to shrink quite a bit, but I don’t know how much. Will it drop to 20%? Lower?

2. Is there a good web site to see a comparison of the compromise plan they will vote on next week and the current tax code? I’ve got the Sunday NYT sitting on my front porch right now, and I assume there will be something there, but I’m away for the weekend won’t be home until tomorrow.

This calculator might help.

[John_Mace]

Mnuchin is saying that 90% of Americans will not itemize, but I’m not inclined to believe him without verifying it elsewhere.

[D_Anconia]

@ElvisL1ves

Buying back stock raises the price, making ownership and options worth more for those who have it. It does not invest in people or technology or anything else that makes a company or the economy grow; it’s just a way to transfer corporate revenue into private pockets.

What’s wrong with revenue going into private pockets? The U.S. is not a collective.

[Ruken]

@D_Anconia

What’s wrong with revenue going into private pockets? The U.S. is not a collective.

Indeed. They could give it all to me! I have private pockets. Why not?

[k9bfriender]

@Ruken

Indeed. They could give it all to me! I have private pockets. Why not?

Did you donate millions of dollars to congresscritters?

[John_Mace]

@Ruken

Indeed. They could give it all to me! I have private pockets. Why not?

@k9bfriender

Did you donate millions of dollars to congresscritters?

If they give me all the corporate profits, I’ll be happy to donate millions of dollars to them!

[elucidator]

When I do it, its “donating”, in the sense of an optimistic contribution. For others, its a purchase on the open market.

[Ruken]

I’m working on a PAC to push for special breaks for the valiant participants in certain online message boards.

[OldGuy]

One thing I’ve not been able to find out anywhere is whether the $250,000/500,000 exclusion on the capital gain on a private home is still allowed under the new tax bill. Does anyone know?

[Alley_Dweller]

@OldGuy

One thing I’ve not been able to find out anywhere is whether the $250,000/500,000 exclusion on the capital gain on a private home is still allowed under the new tax bill. Does anyone know?

Yes it is.

The House version was going to extend the holding period to 5 of 8 years, but the current compromise version contains no changes to the current law on home sales.