The Trump Administration and Congressional Republican leaders on September 27 released a "Unified Framework for Fixing Our Broken Tax Code" (Framework) that will serve as the basis for developing tax reform legislation.

Although the Framework does not provide significant detail around its specific proposals, the noteworthy points for our law firm clients include the following:

— The tax rate applied to the business income of pass-through entities, like partnerships, would be limited to 25%. The House Ways & Means and Senate Finance Committees would draft anti-abuse measures to prevent the characterization of personal income as business income.

— Immediate expensing would be permitted for the cost of new investments in depreciable assets (other than structures) made after September 27, 2017, for at least five years.

— Three individual tax rates (12%, 25%, 35%) would replace the current seven; the standard deduction would be increased to $12,000 for each taxpayer, but most itemized deductions (except home mortgage interest and charitable contribution) would be eliminated.

For a detailed overview of the Framework, see Tax Alert 2017-1563. For more on the individual income tax implications, see Tax Alert 2017-1598.

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