What President Trump’s Proposed Tax Cuts Mean to the Real Estate Industry
President Trump recently unveiled his tax reform outline, and much speculation has ensued. The outline calls for dramatic tax cuts and simplification, but it’s important to understand this is just a proposal and no legislative language has been revealed. Although preliminary, there are a few key aspects of the President’s proposal that could impact the real estate industry.
Carried Interest – The President’s proposal outlines the elimination of ‘targeted tax breaks that mainly benefit the wealthiest taxpayers’. During his campaign, President Trump mentioned eliminating carried interest. Even under the President’s proposed reduced maximum tax bracket of 35%, a change to carried interest rules would result in a 15 – 20% tax increase for investment fund managers currently utilizing this strategy.