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14 Tax Changes for Hedge Funds and Private Equity Under the Trump Tax Reform

  • Section 199A – 20% Deduction

In terms of the above, a 20% deduction for Qualified Business Income (QBI) is applicable for Individuals, Estates and Trusts resulting in a 29.6% effective rate. 

  • Limitations of Section 199A Deduction

50% of the allocable W-2 wage expenses from the QTB, or 25 % of the allocable share of the W-2 wage expenses from the QTB plus 2.5% of the unadjusted basis immediately after acquisition (UBIA) on qualified property.

  • Aggregation of Trade or Business

    • Trades or businesses can aggregate if the individual can demonstrate:
      • That the same owners own 50% or more of every trade to be aggregated:
        • Ownership in partnerships is determined by reference to capital or profits in the partnership.
        • Attribution applies between and individual and his/her spouse (if not legally separated), children, grandchildren and parents.

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