I often find it helpful to see how tax legislation changes existing Internal Revenue Code sections. So, I took a few and made the modifications called for in P.L. 115-97 (12/22/17) (the Tax Cuts and Jobs Act), and show how they change the relevant Code section using track changes. I also include the effective date information. For the changes to 448, I also include a caution about how the favorable methods changes don’t apply to “tax shelters” which could include some limited partnerships and LLCs even though they don’t act like a typical tax shelter.
Here are the ones I modified:
Section 1 – tax rates including kiddie tax change
Section 62 – changes to AGI
Section 163 – changes to mortgage interest and the new interest limitation for non-small entities (and tax shelters – see comment above)
Section 164 – changes to limit the Schedule A deduction for state and local taxes for 2018 through 2025. This track changes includes the text of the 1944 Cumulative Bulletin reference that is at footnote 168 of the PL 115-97 committee report (click Section 164 for all of this). And, thanks to attorney Libin Zhang for finding and improving a copy of these 1944 CB pages you can find here.
Section 274 – changes to entertainment, meals, travel and awards
Section 448 – changes to broaden availability of the cash method of accounting as well as similar changes to unicap (263A), inventory (471) and certain construction contracts (460(e))
Section 451 – changes to timing of income for accrual method taxpayers
Section 1031 – restricts like-kind exchanges to non-dealer real property
Hope you find this useful. Note, these are just a few of the many changes in P.L. 115-97!
Also see historical links here.
What do you think? Annette Nellen.