The Trump administration’s tax reform law includes a provision capping deductions of “excess business losses,” which could mean more taxes for investors on income they previously would have offset, reports Bloomberg’s Lynnley Browning. The cap has been projected to raise $150 billion over 10 years.
But some investors are being advised to maneuver around the cap by buying private aircraft—an expensive purchase that ostensibly can be used for work. Pillsbury’s Michael Kosnitzky tells Browning that others are similarly likely to take advantage of opportunities in the overhauled tax code.
“You should expect highly sophisticated investment fund and family office managers to also find strategies that arbitrage the tax code to benefit themselves,” he said. “This is an industry that likes private planes, gets paid a lot of money and wants to minimize taxes.”