TS Today - Creating a Vision for the Future of Vacation Ownership Issue #159 May/Jun 2018 | Page 48

TimeSharing Today
Page 48
Many associations have net taxable
income less than $50,000, which would
be subject to the 15 percent tax rate.
Effective January 1, 2018, the grad-
uated corporate tax-rate structure is re-
placed with a fl at corporate rate of 21
percent. For associations that chose to
fi le Form 1120 because of the large rate
differential (15 percent vs. 30 percent or
32 percent), that margin has narrowed
and this may be the time to reconsider
the type of fi ling.
Evaluate the relative risk involved,
the resulting tax under both methodolo-
gies, the costs to prepare the different
returns, and any state tax implications.
Other notable changes from the Act
for fi lers of Form 1120, but not com-
monly applicable to vacation-ownership
association returns, are:
• The corporate alternative mini-
mum tax is repealed effective January
1, 2018.
• Net operating losses may only be
carried forward beginning in 2018 (they
can no longer be carried back) and their
use is limited to 80 percent of taxable
income, rather than 100 percent under
the old law.
• Bonus depreciation, which allows
taxpayers to deduct the cost of qualify-
ing property immediately instead of de-
preciating it over a period of years, is
increased to 100 percent through 2022.
Also, the defi nition of qualifying prop-
erty was expanded.
The moral of the story
The changes enacted by the Act are
not expansive in their effects on vaca-
tion ownership and other types of asso-
ciations. However, some opportunities
for tax savings exist. The new provi-
sions of the law described here are just
a small portion of the changes created
by the Act, which contains sweeping
changes to individuals, pass-through
entities, and others.
A new year and new legislation
means that a conversation with your
tax professional is in order to ensure an
understanding of the options and conse-
quences of the changes on each unique
taxpayer and situation.
May/Jun, 2018
Lena
Combs,
CPA,
CGMA,
RRP, is a partner in the fi rm of
WithumSmith+Brown, PC, which pro-
vides clients in the hospitality, vacation
ownership, and other industries with as-
surance, accounting, tax compliance, and
consulting services. For further informa-
tion about Withum and its services, con-
tact her at LCombs@ withum.com or 407-
849-1569, or visit www.withum.com
Lena Combs. Photo courtesy of the author.
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