Bradley attorney Bruce Ely was quoted in Bloomberg Tax on the new IRS rules that are tied to the $10,000 cap on state and local tax deductions. The rules address a safe harbor for businesses donating to a charitable fund in exchange for a state tax credit. However, the IRS didn’t reference a strategy enacted by some states that allows owners of pass-through entities to blunt the impact of the SALT cap by paying income tax at the entity level instead of on their personal taxes.
“The longer they remain silent the better chance that these statutes have of either not being touched or withstanding later scrutiny,” said Ely.
The original article, "SALT Cap Pass-Through Workaround Holds Up After New IRS Rules," appeared in Bloomberg Tax on August 11, 2020.