On August 7, 2022, the Senate passed the Inflation Reduction Act of 2022. The legislation passed the House on August 12, and was signed by President Biden on August 16. Among significant changes designed to fight climate change and incentivize clean energy technologies, the legislation also includes several tax changes that impact businesses. Of importance to many of our clients, the proposed changes to the carried interest rules did not survive in the version passed by the Senate.

Of particular note, the Inflation Reduction Act includes the following changes to the tax code:

• 15 % corporate alternative minimum tax (AMT) on adjusted book income over its corporate AMT foreign tax credit for U.S. corporations with average annual adjusted financial statement income greater than $1 billion (except S-corps, regulated investment companies (RICs), and real estate investment funds (REITs))
• 1% excise tax on corporate stock repurchases and redemptions
• Additional $80 billion in IRS enforcement funding
• A two-year extension of Section 461(l) loss limitation rules for noncorporate taxpayers

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