As there has been a great deal of hype on all sides of tax reform, let’s see if we can dig into the issues with more light and less heat.  Hopefully you find this helpful and instructive on items that will no doubt have lasting ramifications and unintentional consequences for many years.  The summary: The reforms should be good for real estate, with tax advantages for pass-through entities improving.  Before making decisions based on tax reform, please be sure to speak with a tax accountant up to date on the all real estate rules, as those will be coming fast and furiously from the IRS!  To start, let’s get a quick understanding about “the process” and how we got here:

The rules in the Senate, specifically those about budget reconciliation drove the GOP Tax Reform process; or more perhaps accurately, hemmed it in.  The Senate rules would not allow not budgetary items to be included in the bill, though somehow the opening of the ANWR for oil drilling was deemed appropriate.  I say that not to be tongue in cheek or sarcastic, but to highlight that the rules of the Senate can be rather extensive and somewhat archaic.  Nothing illustrates that more the Byrd Bath, or Byrd Rule, named after Sen. Byrd of WV, who was prolific in his ability to ear mark projects (and have them named for him throughout the state).  This provision limits a budgetary item from being either “extraneous” to the budget or would significantly increase the federal deficit beyond a ten-year term.  T
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