Monte Jackel Quoted in Tax Notes on Certain Aspects of House Tax Bill
Monte Jackel, senior counsel at Akin Gump, has been quoted in the Tax Notes article “Passthroughs Get 25 Percent Rate Under Brady Bill,” which examines recent tax legislation introduced in the House of Representatives and its impact on the qualified business income of an owner or shareholder of a passthrough entity. The article reports that passthroughs would face a maximum tax rate of 25 percent as part of the bill.
Jackel said the contemplated rate, coupled with the top income tax rate of 39.6 percent, is likely to put pressure on the bill’s backstops. The 70/30 default split for active business income, the exclusion of personal services businesses from the automatic 30 percent capital percentage (with a default percentage of zero) and the definition of eligible business income are also intended to halt efforts by taxpayers to inappropriately claim income as business income, he added.
Jackel also said he was expecting “to see things like mandatory basis adjustments for partnerships and carried interest” included in the bill. In addition, he commented on changes to self-employment rules and the partnership audit regime.