TCJA

• Corporate Tax Rates and Domestic Manufacturing – § 11(b); § 199 [repealed]: Trump has proposed cutting the corporate tax rate to 20%, or even 15% for companies that make their products in the U.S. Additionally, The Trump administration has proposed reinstating Domestic Production Activities Deduction (DPAD), providing an additional deduction available to domestic manufacturers. Importantly, the construction of real property was a qualifying domestic production activity under DPAD, which ended in 2017. Therefore, if this deduction or something similar is reinstated, certain construction companies could stand to benefit.  
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners.  However, Trump has indicated that he will make the qualified business income deduction permanent. This deduction helps align effective tax rates of C-corporation and partnership structures.
• 100% Bonus Depreciation – § 168(k): Under the TCJA, the 100% rate for bonus depreciation has been phasing down in annual increments of 20 percentage points since 2023 (i.e., a 60% rate is in effect for 2024, but will be reduced to 40% for 2025, 20% for 2026, and 0% for property placed in service after December 31, 2026). Trump has expressed support for a return to 100% bonus depreciation.
• Small Business Election to Expense Depreciable Assets – § 179: The small business expensing limitation permits a current deduction for eligible property, subject to a $1 million cap that is phased out when the cost of the qualifying property exceeds $2.5 million. The TCJA expanded the types of real property that are eligible for immediate expensing. While there are no scheduled changes to the current provision, Trump has expressed support for raising the expensing limit to $2 million.
• Research and Development (R&D) Expenditures – § 174: Lawmakers in both parties have expressed interest in reversing the TCJA capitalization treatment and returning to prior law, allowing immediate deduction for R&D expenditures. Trump has expressed support for “expanded R&D tax credits,” making it unclear what his position will be in reversing the TCJA provision. However, we expect a more tax-favorable treatment of R&D expenditures.
• Capital Gains Rate – § 1(h): The Trump administration and congressional allies are not expected to increase the capital gains rate.
• Carried Interest – § 1061: The Trump administration and congressional allies are not expected to reclassify carried interest as ordinary income.
• Like-Kind Exchanges – § 1031: The Trump administration and congressional allies are not expected to place limitations on or eliminate 1031 exchanges.
• Net Investment Income Tax – § 1411: The Trump administration and congressional allies have not expressed whether they would expand or reduce the net investment income tax.

TCJA

• Corporate Tax Rates– § 11(b): Trump has proposed cutting the corporate tax rate to 20%.
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners. However, Trump has indicated that he will make the qualified business income deduction permanent. This deduction helps align effective tax rates of C-corporation and partnership structures.
• 100% Bonus Depreciation – § 168(k): Under the TCJA, the 100% rate for bonus depreciation has been phasing down in annual increments of 20 percentage points since 2023 (i.e., a 60% rate is in effect for 2024, but will be reduced to 40% for 2025, 20% for 2026, and 0% for property placed in service after December 31, 2026). Trump has expressed support for a return to 100% bonus depreciation.
• Small Business Election to Expense Depreciable Assets – § 179: The small business expensing limitation permits a current deduction for eligible property, subject to a $1 million cap that is phased out when the cost of the qualifying property exceeds $2.5 million. The TCJA expanded the types of real property that are eligible for immediate expensing. While there are no scheduled changes to the current provision, Trump has expressed support for raising the expensing limit to $2 million.
• Capital Gains Rate – § 1(h): Trump and congressional allies are not expected to increase the capital gains rate.
• Like-Kind Exchanges – § 1031: Trump and congressional allies are not expected to place limitations or eliminate 1031 exchanges.
• Net Investment Income Tax – § 1411: Trump and congressional allies have not expressed whether they would expand or reduce the net investment income tax.

• Corporate Tax Rates – § 11(b): Trump has proposed cutting the corporate tax rate to 20%.
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners.  However, Trump has indicated that he will make the qualified business income deduction permanent. This deduction helps align effective tax rates of C-corporation and partnership structures.
• 100% Bonus Depreciation – § 168(k): Under the TCJA, the 100% rate for bonus depreciation has been phasing down in annual increments of 20 percentage points since 2023 (i.e., a 60% rate is in effect for 2024, but will be reduced to 40% for 2025, 20% for 2026, and 0% for property placed in service after December 31, 2026). Trump has expressed support for a return to 100% bonus depreciation.
• Capital Gains Rate – § 1(h): Trump and congressional allies are not expected to increase the capital gains rate.
• Interest Expense Limitation – §163(j): Under the TCJA, this deduction for business interest was initially limited to 30% of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).  However, effective January 1, 2022, the limitation automatically tightened to 30% of Earnings Before Interest and Tax (EBIT), significantly reducing the allowable deduction.  The Trump administration has proposed reverting to the original EBITDA-based limitation, which would provide private equity firms with greater capacity to leverage portfolio investments.  This change could facilitate larger investment in both organic growth and acquisitions.

TCJA

• Lower Personal Income Tax Rates -§1: The Trump administration has expressed intent to permanently extend the lower personal income tax rates outlined by the TCJA.
• Capital Gains Rate – § 1(h): The Trump administration and congressional allies are not expected to increase the capital gains rate.
• Estate Tax: The Trump administration is expected to seek permanent extension of the estate tax increased exemption, or potentially repeal the estate tax entirely.
• Cap on Deduction for State and Local Taxes (SALT) – § 164(b)(6): The Trump administration has expressed support for removing the $10,000 cap and reinstating the full deduction for SALT. If the full deduction is not restored, many expect that the Trump administration and congressional allies will increase the cap.
• Standard Deduction - § 63: The Trump administration intends to extend the increase in the standard deduction, which is $14,600 for single filers and $29,200 for married couples filing jointly for 2024.
• Child Tax Credit –§ 24: If TCJA is not extended, the child tax credit would be reduced from $2,000 to $1,000 per child starting January 1, 2026. The additional dependent tax credit of $500 per dependent would be eliminated.
• Alternate Minimum Tax (AMT) – §55: The Trump Administration has proposed extending the TCJA policies regarding AMT. Most households have been exempted from AMT since it was restructured to include only the highest earners under TCJA.  IF TCJA is not extended, AMT will apply to a much larger group of individuals.
• Social Security Benefits – §86: The Trump administration has proposed exempting Social Security benefits from income taxes.
• Tip and Overtime Pay Exemptions – §61; 6053: The Trump administration has proposed exempting both overtime pay and tips from income taxes.
• Itemized Deductions – §63: The Trump administration has proposed creating an itemized deduction for auto loan interest.
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners.  However, Trump has indicated that he will make the qualified business income deduction permanent. This deduction helps align effective tax rates of C-corporation and partnership structures.

• Base Erosion and Anti-Abuse Tax (BEAT) - § 59A: Under the TCJA, a 10% BEAT tax rate applies for base erosion payments meeting the threshold through 2025. The BEAT tax rate is set to increase to 12.5% for years after 2025. Trump has not stated that he intends to make any change to the BEAT.  
• Global Intangible Low-Taxed Income (GILTI) Deduction Percentage – § 250: The TCJA added a new current tax rule effectively resulting in the tax of almost all foreign earnings on a current year basis. Part of the GILTI calculation allowed for a 50% deduction against GILTI income. This deduction is set to decrease to 37.5% starting in 2026. As a result, the effective tax rate on GILTI income inclusions will increase from 10.5% to 13.125% (or more, depending on the impact of foreign tax credits). Trump has not stated that he intends to make any change to GILTI.  
• Foreign-Derived Intangible Income (FDII) Deduction Percentage (§ 250(a)(3)): The TCJA also added a deduction of 37.5% for certain foreign-earned income, resulting in an effective tax rate of 13.125% on such income. Beginning with 2026, the deduction percentage is reduced to 21.875%, which would increase the effective rate on FDII income to 16.406%. Trump has not stated that he intends to make any change to the FDII deduction.

TCJA

• Corporate Tax Rates and Domestic Manufacturing – § 11(b); § 199 [repealed]: Trump has proposed cutting the corporate tax rate to 20%, or down to15% for companies that make their products in the U.S. This reduction is aimed at encouraging corporate tax relief and increasing domestic investment. Additionally, The Trump administration has proposed reinstating Domestic Production Activities Deduction (DPAD), providing an additional deduction available to domestic manufacturers.
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners.  However, Trump has indicated that he will make the qualified business income deduction permanent. This deduction helps align effective tax rates of C-corporation and partnership structures.
• 100% Bonus Depreciation – § 168(k): Under the TCJA, the 100% rate for bonus depreciation has been phasing down in annual increments of 20 percentage points since 2023 (i.e., a 60% rate is in effect for 2024, but will be reduced to 40% for 2025, 20% for 2026, and 0% for property placed in service after December 31, 2026). Trump has expressed support for a return to 100% bonus depreciation.
• Small Business Election to Expense Depreciable Assets – § 179: The small business expensing limitation permits a current deduction for eligible property, subject to a $1 million cap that is phased out when the cost of the qualifying property exceeds $2.5 million. The TCJA expanded the types of real property that are eligible for immediate expensing. While there are no scheduled changes to the current provision, Trump has expressed support for raising the expensing limit to $2 million.
• Research and Development (R&D) Expenditures – § 174: Lawmakers in both parties have expressed interest in reversing the TCJA capitalization treatment and returning to prior law, allowing immediate deduction for R&D expenditures. Trump has expressed support for “expanded R&D tax credits,” making it unclear what his position will be in reversing the TCJA provision. However, we expect a more tax-favorable treatment of R&D expenditures.
• Interest Expense Limitation – §163(j): Under the TCJA, this deduction for business interest was initially limited to 30% of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). However, effective January 1, 2022, the limitation automatically tightened to 30% of Earnings Before Interest and Tax (EBIT), significantly reducing the allowable deduction. The Trump administration has proposed reverting to the original EBITDA-based limitation. This change could facilitate larger investment in both organic growth and acquisitions.

Tariffs

• While not a change to tax policy, introducing tariffs has the potential to significantly influence a manufacturer’s overall bottom line.
• The Trump administration has proposed a general tariff of 10-20% on all U.S. imports, with a targeted 60% tariff on imports from China.
• Corporations reliant on imports, especially in manufacturing, technology, and consumer goods, may face strategic challenges.
  • Companies may need to adjust supply chains and consider domestic sourcing to offset higher import costs.
  • Tariffs could lead to pricing adjustments, with companies either absorbing costs or passing them to consumers, increasing inflation and impacting demand.
• This may lead to increased opportunity for U.S.-based companies with domestic supply chains, as imported goods become more costly.

• Interest Expense Limitation – §163(j): Under the TCJA, this deduction for business interest was initially limited to 30% of Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). However, effective January 1, 2022, the limitation automatically tightened to 30% of Earnings Before Interest and Tax (EBIT), significantly reducing the allowable deduction. The Trump administration has proposed reverting to the original EBITDA-based limitation, which would provide private equity firms with greater capacity to leverage portfolio investments. This change could facilitate larger investment in both organic growth and acquisitions.
• 100% Bonus Depreciation – § 168(k): Under the TCJA, the 100% rate for bonus depreciation has been phasing down in annual increments of 20 percentage points since 2023 (i.e., a 60% rate is in effect for 2024, but will be reduced to 40% for 2025, 20% for 2026, and 0% for property placed in service after December 31, 2026). Trump has expressed support for a return to 100% bonus depreciation, which allows for the immediate 100% expensing of capital expenditure. This opens the door for private equity to create value through spending.
• Research and Development (R&D) Expenditures – § 174: Lawmakers in both parties have expressed interest in reversing the TCJA capitalization treatment and returning to prior law, allowing immediate deduction for R&D expenditures. Trump has expressed support for “expanded R&D tax credits,” making it unclear what his position will be in reversing the TCJA provision.  However, we expect some form of a more tax-favorable treatment of R&D expenditures.
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners. However, Trump has indicated that he will make the qualified business income deduction permanent. This deduction helps align effective tax rates of C-corporation and partnership structures.
• Domestic Production Activities Deduction (DPAD) – § 199 [repealed]: The Trump administration has proposed reinstating DPAD, providing an additional deduction available to domestic manufacturers. Reinstating this provision aligns with broader administration goals to incentivize investment in U.S.-based manufacturing.

For the commercial real estate community in particular, industry-wide concerns over the expiration or removal of key TCJA tax breaks have been looming.

TCJA

• Corporate Tax Rates and Domestic Manufacturing – § 11(b); § 199 [repealed]: Trump has proposed cutting the corporate tax rate to 20%, or even 15% for companies that make their products in the U.S. Additionally, The Trump administration has proposed reinstating Domestic Production Activities Deduction (DPAD), providing an additional deduction available to domestic manufacturers. Importantly, the construction of real property was a qualifying domestic production activity under DPAD, which ended in 2017. Therefore, if this deduction or something similar is reinstated, commercial real estate developers structured as a C-corporation could benefit.  
• Qualified Business Income Deduction for Passthrough Entities – § 199A: The TCJA provided a new provision for owners of passthrough entities to deduct up to 20% of qualified business income earned in a qualified trade or business. This deduction is set to expire in 2026, resulting in potentially higher tax liabilities for owners. However, Trump has indicated that he will make the qualified business income deduction permanent.
• 100% Bonus Depreciation – § 168(k): Under the TCJA, the 100% rate for bonus depreciation has been phasing down in annual increments of 20 percentage points since 2023 (i.e., a 60% rate is in effect for 2024, but will be reduced to 40% for 2025, 20% for 2026, and 0% for property placed in service after December 31, 2026). Trump has expressed support for a return to 100% bonus depreciation.
• Small Business Election to Expense Depreciable Assets – § 179: The small business expensing limitation permits a current deduction for eligible property, subject to a $1 million cap that is phased out when the cost of the qualifying property exceeds $2.5 million. The TCJA expanded the types of real property that are eligible for immediate expensing. While there are no scheduled changes to the current provision, Trump has expressed support for raising the expensing limit to $2 million.
• Research and Development (R&D) Expenditures – § 174: Lawmakers in both parties have expressed interest in reversing the TCJA capitalization treatment and returning to prior law, allowing immediate deduction for R&D expenditures. Trump has expressed support for “expanded R&D tax credits,” making it unclear what his position will be in reversing the TCJA provision. However, we expect a more tax-favorable treatment of R&D expenditures.
• Capital Gains Rate – § 1(h): Trump and congressional allies are not expected to increase the capital gains rate.
• Carried Interest – § 1061: Trump and congressional allies are not expected to reclassify carried interest as ordinary income.
• Like-Kind Exchanges – § 1031: Trump and congressional allies are not expected to place limitations or eliminate 1031 exchanges.
• Net Investment Income Tax – § 1411: Trump and congressional allies have not expressed whether they would expand or reduce the net investment income tax.