On December 22, the President signed the Tax Cuts and Jobs Act (“TCJA”) into law. TCJA changes the taxation of individuals and businesses in many ways. While there are still many open questions to be addressed by technical corrections and regulatory guidance, the outlines of the new tax regime are now clear. This Client Alert summarizes a number of TCJA provisions that are expected to be important to the real estate industry, including public and private REITs, real estate fund sponsors, and investors.

Summary -

Individual and Corporate Tax Rates. TCJA permanently replaces the current schedule of corporate tax rates (with a maximum rate of 35%) with a flat 21% corporate tax rate. TCJA also permanently repeals the corporate alternative minimum tax. Special rules apply for the recovery of AMT credits accrued under prior law.