CHICAGO (Feb. 28, 2018) – A flash poll conducted by Baker Tilly Virchow Krause, LLP (Baker Tilly) indicates 36 percent of fund managers specify qualified business income (QBI) deductions as the greatest challenge faced from the passage of tax reform.
“The Tax Cuts and Jobs Act (TCJA) contains one provision of particular concern to partnerships and sole proprietorships in the alternative assets industry, Code Section §199A, which reduces the QBI deductions tax rate for pass-through entities to 20 percent,” Jean-Paul Schwarz, JD, LLM, principal with Baker Tilly’s financial services tax practice, said.
“When calculating QBI deductions, the mathematics behind it can be exceedingly complicated,” Gregory Kastner, CPA, senior tax manager with Baker Tilly’s financial services practice, said. “Since you need to calculate the deduction at each trade or business level, structures having several partnerships can find this calculation to be a tedious process.”
Baker Tilly recently held an educational webinar, “Tax reform for hedge funds, private equity and alternative assets: Final bill impacts,” to assist hedge funds, private equity funds, management companies and general partnerships in understanding the impacts of the final tax reform bill, including specific provisions that could impact organizations’ planning and strategies in 2017 and beyond.
The webinar presenters discussed:
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