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RVDA details impact of tax reform on industry

(Dec. 21, 2017) -- Establishes a top rate of 21 percent for corporations starting in 2018 and 20 percent for "qualified business income" of certain small businesses that pass on profits to owners and are taxed at individual tax rates.

WASHINGTON, D.C. — President Trump has signed the Tax Cuts and Jobs Act. The bill quickly made its way through both the U.S. House and Senate with limited amendments.

Here are some highlights of interest to RV dealers:

Corporate Taxes
Establishes a top rate of 21 percent for corporations starting in 2018 and 20 percent for “qualified business income” of certain small businesses that pass on profits to owners and are taxed at individual tax rates.

Mortgage Interest Deduction
Allows mortgage interest deduction on loans totaling up to $750,000 for primary residence and second homes, including RVs.

Business Interest Expense
For business with more than $25 million in gross receipts, net interest deduction is limited to 30% of earnings before interest, taxes, depreciation, amortization, and depletion, through 2021. The law allows full deduction of all floor plan financing interest expenses for motorhomes. Travel trailer floor plan financing expenses would be subject to the 30 percent limit. RVDA and its allies will be working to adjust this provision in 2018. Again, small businesses under $25 million in gross receipts are exempt from the interest deduction limitations.

Estate Tax
Increases exemption to $10 million ($20 million for a surviving spouse); indexed for inflation; expires in 2025.

This summary is provided to dealers as an informational overview of the tax reform law, not as tax advice. Consult your tax advisor to address specific tax advice questions. RVDA will provide additional information as it becomes available.

SOURCE: RVDA press release

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About Ronnie Garrett

Ronnie Garrett is the editor in chief of RV Daily Report. She's been a writer/editor for more than 25 years, working in law enforcement, aviation, supply chain and now the RV industry. She's not a stranger to RVs, however. She grew up camping, and still camps as many weekends as she can every year.

One comment

  1. The 20% you mention for qualified business income is a little wrong. Its a deduction of 20 % of the qualified business income. So if a pass through brings 500K in a K-1 it reduces it to 400K. You still pay whatever your rate is.

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