The Business Valuation Committee (BVC) of American Society of Appraisers (ASA) is studying the new tax law to assess its impact on the valuation profession and changes to applied procedures that may be necessary, according to a release from the ASA.
A Tax Reform Task Force (TRTF) has been appointed, chaired by William H. Frazier, ASA, to study these issues and present recommended solutions. The task force, comprised of thought leaders within BV, will likely solicit opinions from various valuation scholars and academics.
As recommendations are developed, they will be communicated by ASA's BVC to the valuation profession.
The Tax Cuts and Jobs Act became effective on January 1, 2018, which may impact the value of various entities and intangible assets. This will necessitate changes in our practice application to value these entities and assets, the release said.
At this juncture, the task force has identified the following topics for study. Many of the topics impacted by the new tax law have complicated rules and exceptions not listed here:
- Corporation 21 percent; flat tax rate;
- Deductibility of interest – new limits;
- 100 percent expensing of certain capital expenditures;
- Pass-through income 20 percent deduction;
- Patents – elimination of capital gain treatment on sale of “self-created” patent;
- Net operating losses – carry forward limited to 80 percent of income; and
- Like-kind exchanges – repeals application to certain business or investment property.