1. Impact of Tax Cuts and Jobs Act

2. Tax Reform Impact on Hospitality and Vacation Ownership

3. Effective Dates
President Trump signed the Tax Cuts and Jobs Act into law on December 22, 2017.
Unless otherwise noted, the changes are effective on January 1, 2018.
Focus on Corporate and pass-through business tax cuts.

4. Taxation of C-Corporation Income
Now taxed at a flat rate of 21%
Corporations with a December 31, 2017 calendar year-end will need to adjust their deferred tax assets and liabilities shown on their 2017 financial statements
Corporate alternative minimum tax is repealed; alternative minimum tax credits allowed to offset a company’s regular tax liability for any tax year
The Act eliminates Net Operating Loss carrybacks

6. Section 179 Deduction Old Law: New Law: Expensing Limitation
$500,000 indexed for inflation
$1,000,000 for tax years beginning after 12/31/17
Phase-out Threshold
$2,000,000 indexed for inflation
$2,500,000 for tax years beginning after 12/31/17,
Effective Date
Tax years beginning before 1/1/2018
Tax years beginning on or after 1/1/2018

7. Bonus Depreciation Section 168(k)
Old Law:
New Law:
Eligible Assets
Tangible property with regular depreciable life of 20 years or less.
Also Includes:
Computer software
Water utility property
Qualified improvement property (QIP)
Automatically applies to QIP which now is intended to have 15 year life
Qualified film, TV, theater production
Percentage Deduction
50% bonus in 2017
40% bonus in 2018
30% bonus in 2019
No bonus in 2020 & forward
100% bonus: 9/27/2017 – 12/31/2022
80% bonus in 2023
60% bonus in 2024
40% bonus in 2025
20% bonus in 2026
No bonus in 2027 & forward
New or Used Property
Only available for new assets, no used property
Removed requirement that asset be new, must be first use by taxpayer

9. Entertainment expenses disallowed, Meals limited
For years after 2017, generally, no deduction is allowed for: (1) an activity considered to be entertainment, amusement, or recreation, (2) membership dues for any club organized for business, pleasure, recreation, or other social purposes, or (3) a facility used in connection with any of the above items.
The deduction for business meals equal to 50% of the food and beverage expenses associated with operating a trade or business is retained.
Meals provided for the convenience of the employer (on the premises) that are nontaxable to the employee as a de minimis fringe benefit are now only 50% deductible.

12. Thank You For Your Time! Ryan Brandt, CPA rbrandt@Withum.com
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