Modeling New Pass-through Tax Changes

searcher profile

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.

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commentor profile
Reply by a searcher
from Hong Kong University of Science and Technology in Miami, FL, USA
Let me know what your final models ends up looking like: redacted Consider AON. They can conduct due diligence on Tax structures. Can put you in touch with them - they defer fees on success if you commit to buying insurance from their post acquisition.
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Reply by a searcher
from Hong Kong University of Science and Technology in Miami, FL, USA
I’m encountering the same... yet further interesting to me because I’m looking at Puerto Rico as a jurisdiction to HQ at to take advance of the ACT 20 law.
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