How proposed tax reform might
affect the valuation profession
and the real estate industry
by Bill Garber
House and Senate Republicans in December were putting the final touches on a $1.5 trillion tax reform plan that represents the most sweeping overhaul of the federal tax code in three decades.
The House on Nov. 16 approved HR 1, the Tax Cuts and
Jobs Act; the Senate passed its version of the tax plan on
Dec. 2. Since Congressional leaders were still working
on the final package as Valuation magazine went to print,
any plan enacted by the 115th Congress might differ
from what’s addressed in this article.
The House bill includes several priority items that were
included in the White House and Republican leadership’s
“Unified Framework for Fixing Our Broken Tax Code,”
which was released in September and broadly outlines
ideas around tax simplification and economic growth.
Reaction from the residential real estate community
so far has been negative, as battle lines have been drawn
around eliminations or reductions in deductions that
are treasured by real estate agents and home builders.
However, other business interests stand to benefit from
some of the proposed changes, especially some “
pass-through” entities such as partnerships, limited liability
companies, real estate investment trusts and subchapter
S corporations, which are common structures within
the real estate industry. Other real estate–related tax credits are on the chopping block, and advocates likely won’t
let those go without a fight, as both the House and the