In our white paper, Tax Reform Near the Finish Line: What’s in the Bill, we summarize the portions of the Tax Cuts & Jobs bill of particular interest to investors, as well as the likely winners and losers under that legislation.
The Senate subsequently agreed to the following changes to its bill during floor consideration and voting:
After the House and Senate versions are distilled into a single bill, we will update our white paper to incorporate the final provisions.
In the meantime, financial advisors have asked about other parts of the pending legislation that might impact their clients. Following are some of the questions we have received, along with our responses.
The initial drafts of the bills would have taxed deferred compensation at such earlier time as the compensation payment was no longer contingent on future services to be provided by the recipient, even if actual payment is deferred beyond that date. Further, the bills would have applied these deferred compensation rules to grants of stock options. However, these changes were dropped from both bills during committee review. The changes could be added back during the process of distilling the House and Senate versions into as single bill, but given the prior rejection of the changes, that addition back seems unlikely.