Modeling New Pass-through Tax Changes

December 30, 2017
by a searcher from The University of Chicago - Booth School of Business in 2122 W Le Moyne St, Chicago, IL 60622, USA
Hi All -
For those that are planning to structure their search acquisitions as pass-through entities, how are you modeling the new tax law changes? I had previously simply been using the top personal income tax rate (~40%) to calculate an after-tax IRR, but the new law for pass-throughs should significantly reduce that.
My new interpretation is to deduct 20% of the income and then apply the top rate, but I would be curious how others are approaching this.
Obviously I will consult an expert once an acquisition is made, but just looking for a good assumption for modeling an after-tax IRR for now.
Thanks.
from Hong Kong University of Science and Technology in Miami, FL, USA
from Hong Kong University of Science and Technology in Miami, FL, USA