New IRS Regs May Quash Popular SALT Cap Workaround

Law360 (August 12, 2020, 4:08 PM EDT) -- This week, the Internal Revenue Service published its final regulations on Internal Revenue Code Sections 162, 164 and 170 addressing attempts to end-run the 2017 Tax Cuts and Jobs Act's cap on state and local tax, or SALT, deductions.[1]

Prior to the TCJA, Section 164 authorized taxpayers to deduct the full amount of their state and local taxes — mostly property taxes and income taxes — subject to the limitation on itemized deductions. In December 2017, Congress enacted the TCJA, including revised Section 164(b)(6), which limits the aggregate deduction of these taxes to $10,000 — less if not filing a joint...

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