The Act retains the long-term capital gain treatment for carried interest but increases the holding period to three years to qualify. The active business loss deduction (other than corporations) is now capped at $250,000 ($500,000 for married filing jointly).

Unlike the past rules, the Act now allows individuals to deduct 20% of the qualified business income (QBI) from a pass-through entity. The deduction is limited to the greater of 50% of the W-2 wages or the sum of 25% of the W 2 plus 2.5% of the unadjusted basis of acquired qualified property. Taxpayers shall compute their QBI first before looking at the limitation. Certain exceptions apply.


The Act allows a 100% deduction for the foreign-source portion dividends received for 10% owned foreign subsidiaries of U.S. corporations. On the other hand, the Act now repeals indirect foreign tax credits except for certain circumstances.

The Act imposes a one-time repatriation of deferred foreign-income deemed and taxed at 15.5% for cash and cash equivalents (8% for other assets). In addition, the Act includes several provisions that aim to prevent the erosion of U.S. tax base, such as denial of deductions for certain related-party transactions, among others.

Taxpayers should discuss with their tax advisors how the new provisions affect their tax posture. Additionally, given the scope of the Act and the pace of developments, clarifications and guidance are expected for the implementation of the Act.

Akash Sehgal, Partner at Green Hasson Janks, leads the Firm’s Tax Practice, along with having deep expertise in multistate income and franchise tax, sales and use tax and credits and incentives. He has more than 20 years of tax experience, and prior to joining Green Hasson Janks he worked at two Big Four firms in Los Angeles and Seattle. Curtis Kim, Principal at Green Hasson Janks, has more than 15 years of accounting experience with a concentration on a broad range of income tax planning matters, including domestic and international reorganizations, mergers and acquisitions, divestitures, joint ventures, technology transfers and tax-efficient capital structures. Aubérie Silvain is a Tax Associate at Green Hasson Janks. Prior to Green Hasson Janks she worked at an accounting firm in Paris, France. To learn more, visit


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