Carried interest allows the managers of certain private equity funds to treat much of their earnings as long-term capital gains rather than ordinary income, reducing the amount of taxes they must pay by almost 50%. There is substantial bipartisan support for closing this loophole and treating carried interest as ordinary income.
The Affordable Care Act (ACA) introduced a 3.8% surtax on net investment income for taxpayers with an adjusted gross income of $200,000 (single) or $250,000 (married filing jointly). With Republicans eager to repeal and replace the ACA, this surtax potentially could be eliminated.
From a global perspective, the U.S. tax on corporate income is high (up to 35% in some cases). A Trump administration and Republican-controlled Congress likely will seek to reduce corporate taxes in an effort to make the U.S. more competitive with other nations.
During the campaign, Donald Trump proposed a one-time, 10% tax rate "holiday" for corporate profits brought back to the U.S. from abroad. The hope is that the revenue generated would help pay for the tax cuts provided to individuals under his plan.
There's a strong possibility that the current gift and estate taxes will be repealed. However, if that were to happen, there also is talk of eliminating the ability to “step up" the basis of investment assets at the time of death, which would result in either a carryover basis or the potential requirement to pay capital gains taxes at death.
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