Last Minute Change To Tax Bill Could Benefit Real Estate Moguls

A last minute provision added to the Republican's tax reform bill during reconciliation would provide real estate moguls with a significant tax break.

Under the new provision, the GOP tax bill would include a 20%deduction for income-producing "pass-through" entities including real estate structures like LLCs and S-Corporations.

The Senate bill previously safeguarded this deduction for businesses that paid significant wages to employees, but the new bill provides a way around the safeguard, according to International Business Times.

This money is referred to as "pass-through" because it passes through the private entity that owns an asset to the investors who control it, and has typically been subject to each investor's personal tax rate.

Sen. Bob Corker, a Republican who earned enough as a real estate investor to rank as the Senate's fourth wealthiest member, originally voted against the Senate version of the tax reform bill, but changed his vote after reconciliation. Sen. John Cornyn, the Republican from Texas who serves as majority whip, told ABC’s George Stephanopoulos that the tax cut, which would also result in a multimillion-dollar return for President Donald Trump, was part of an effort to secure enough votes for the legislation to pass.

Corker denied knowledge of the provision on Sunday, saying he had not read the the new tax bill despite changing his vote.

The original bill was said to provide a large tax cut for middle-income families, in addition to stimulating economic growth. Trump had also claimed the overhaul would cost him financially, but the latest reform has been called a “windfall” for developers such as Trump, as well as a number of GOP lawmakers who own depreciable property assets such as rent-generating apartments and office buildings, Vox reports.

The House is expected to vote on the bill on Tuesday. It is expected to land on the desk of the President later this week.

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's National Newsletters
Related Stories

How Integrated Infrastructure Can Help AI Data Centers Deploy Faster, Build Smarter

Nvidia Buys Stake In Data Center Power Company

Invesco Cuts Fees, Adds Incentives To Quell Fund Redemption Requests

Investors Anchor Big Capital Into Marinas, Betting On Shallow Supply

NYC Office Investor Warns It Could Go Under As Defaults Pile Up

Pinewood Studios Pays Owners £100M Dividend And Completes £300M Refinancing

Nike Closes 15 Stores Amid Tumultuous Year

Large Commercial Real Estate Sales Up 30% Despite Economic Headwinds

Evergrande Founder Sentenced To Life, 56 Others Sent To Prison In China

Loud And Clear: Why Aiphone Thinks Intercom Ownership Is Best For Multitenant Buildings

Coconut Grove Office Flipped For $15M Gain After One Year

The Fast-Food Exec Taking Her Real Estate Talents To The Looksmaxxing Era