Compliance Week recently featured content from a blog post written by Bass, Berry & Sims attorney Jay Knight regarding deferred tax assets under a Trump administration. Jay's post states that many observers now believe a reduction in the corporate tax rate is a realistic possibility as a result of the combination of a new Trump administration and a Republican-controlled Congress. According to www.donaldjtrump.com, "[t]he Trump Plan will lower the business tax rate from 35 percent to 15 percent, and eliminate the corporate alternative minimum tax." In light of these dynamics, a potential sleeper issue for many companies, especially those carrying sizeable deferred tax assets on the balance sheet, is a potential charge to earnings resulting from the remeasuring of deferred tax assets due to a change in the corporate income tax rate.
The full article, "Does Tax Reform Mean Tax Risk for Companies with Deferred Positions?" was published by Compliance Week on January 18, 2017, and is available online. Read Jay's full analysis on the Securities Law Exchange blog here.