Tax readiness: Accounting methods tax planning after tax reform

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August 2019

Overview

The 2017 tax reform (the Act) enacted or amended a number of provisions relating to accounting methods, most notably for revenue recognition and bonus depreciation. Accounting methods can be an important tool in strategies for reducing exposure from tax reform provisions that are not specifically accounting methods, such as the base erosion and anti-abuse tax (BEAT) and the Section 163(j) business interest deduction limitation. PwC on August 6 hosted a webcast featuring specialists who discussed these issues. This Insight highlights those discussions. 

The next Tax Readiness webcast — California: Key Developments in the Golden State — is scheduled for August 14, 2019, from 2:00 PM - 3:00 PM (EDT).

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The takeaway

In light of tax reform, tax accounting methods currently have a heightened importance and will continue to be relevant going forward. In addition to analyzing the substantial changes to tax accounting provisions such as Section 451 and bonus depreciation, taxpayers should consider tax accounting methods in complying with, and planning for, new provisions such as the BEAT, Section 163(j), and GILTI. Section 1341 provides a unique opportunity and should be considered in light of rate reduction. While Section 118 has been repealed, it still may provide companies a benefit under the Act’s transition rule. Finally, RPEs should consider their need to comply with reporting requirements under Section 199A, and taxpayers should consider whether to early adopt the new UNICAP regulations in 2018.

Contact us

George Manousos

Partner, Federal Tax Services, PwC US

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