On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (the “Act”). The Act was ostensibly promoted as a means to encourage investment and to promote growth in the U.S. economy, while reducing harmful “loopholes” and potential incentives to move profitable business operations offshore. Although the actual economic impact remains to be seen, there is no question that the Act dramatically alters the federal government’s historical approach to both domestic and international taxation in a variety of highly meaningful ways. Moreover, given the relatively short time frame in which the Act was negotiated, drafted, and ultimately passed, we believe that time will reveal not only potential opportunities for tax minimization but also possible traps for the unwary.

In a previous Client Alert, we provided a general overview of the wide range of individual, business, and international changes accomplished by the Act.3 In this Client Alert, we focus on the impact of the Act on mergers and acquisitions (“M&A”), private equity (“PE”), and venture capital (“VC”) transactions. As discussed in more detail below, key changes brought about by the Act include...