New excise tax on college and university net investment income

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January 2018

Overview

The 2017 tax reform reconciliation act* (the Act) will impact colleges and universities in numerous ways, including a new excise tax on the 'net investment income’ of certain higher education institutions effective for tax years beginning after December 31, 2017.

Colleges and universities should consider the impact of the tax and begin planning how they will determine investment assets per student, gather and track investment data, and calculate net investment income.

The takeaway

Tax-exempt, private colleges and universities should consider the impact of the tax and begin planning how they will determine their investment assets per student, gather and track investment data, and calculate net investment income. Colleges and universities should identify applicable related organizations and review their investment portfolio to consider the impact of this new excise tax for taxable years beginning after December 31, 2017.

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Kelley McLaughlin

US Tax Marketing Leader, PwC US

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