How would the Big Beautiful Bill affect SALT? What you need to know.
As the Republican Party's signature economic bill heads to the Senate after being passed by the House, one of the key sticking points is a cap on state and local tax deductions that hits Americans in high-tax states especially hard.
Lawmakers in 2017 set that deduction limit, known as the SALT cap, at $10,000 to offset Trump's tax cuts for individuals and corporations. But some lawmakers in high-tax states — Democrats and Republicans alike — have lambasted the limit as a burden on their constituents. In effect, the cap meant some taxpayers who itemize get a smaller deduction and bigger tax bill.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
20 minutes ago
- Forbes
What To Know About The IRS's $4 Billion Tax Assessment On Yum! Brands
KFC Taco Bell (Photo by Artur Widak/NurPhoto via Getty Images) The IRS has assessed $4 billion in taxes, penalties, and interest on Yum! Brands. The issue stems from a tax-deferred reorganization in 2014. Yum! Brands is now suing to prevent the IRS from collecting these funds. M&A is often among the most complicated tax issues large corporations face, which can often lead to uncertainty and scrutiny from the IRS. In this article, I discuss the Yum! Brand corporation, what happened in 2014, and why they are facing such a steep tax penalty now over a decade later. Yum! Brands is the parent company of KFC, Taco Bell, Pizza Hut, and Habit Burger & Grill. As noted by The Washington Post, this corporation spun off from PepsiCo in 1997 to become among the largest set of restaurant chains in the United States and the world. While it currently features those three staples, the corporation has also previously held other chains, such as A&W and Long John Silvers. Yum! Brands has been known to be innovative by having combination restaurants. In these situations, customers can order from a KFC or Taco Bell (or both) at the same location. What makes Yum! Brands particularly impactful is their international appeal. As stated on the Yum! Brands website, the brands total over 61,000 locations and can be seen in 155 countries. According to CNN, KFC has blossomed to become an international staple in countries like Japan, where people often have KFC as their Christmas dinner. Yum! Brands is also no stranger to tax-related news. In early 2025, the company announced a different restructuring. While the company is famously headquartered in Louisville, Kentucky (hence, Kentucky Fried Chicken), Fortune reported that it will be relocating to Plano, TX, due to, among other things, taxes. Kentucky is a state that levies a corporate income tax (5% in 2025). Meanwhile, Texas famously has a 0% tax rate on corporate profits. Individual income tax is also not levied in Texas. Newsweek suggests that Texas has become a bit of a tax haven for new corporate headquarters such as Tesla, Toyota, Charles Schwab, Chevron, and now Yum! Brands. Prior to 2014, Yum! Brands was made up of separate legal entities based on brand and region. For example, there were separate legal entities for KFC Asia and KFC Europe. According to court filings, On November 30, 2013, Yum! Brands publicly announced a corporate reorganization. In this reorganization, the company would no longer be broken out into segments based on geography. Instead, it would focus its organization based on brands (i.e., KFC, Taco Bell, and Pizza Hut). It would also have separate divisions for China and India. The goal of this reorganization was to drive growth. To help facilitate the reorganization, the new subsidiaries issued stock in exchange for stock in the previous subsidiary. This stock for stock reorganization often falls under the Internal Revenue Code Section 368(a)(1)(B), which allows for the acquisition of a corporation solely in exchange for all or part of its voting stock. As long as all of the conditions are met, the Yum! Brand legal entities can exchange the stock without recognizing a gain on the appreciated value of the stock. The conditions for this type of reorganization are as follows: Reorganizations under Section 368 are valuable for a company like Yum! Brands because it wishes to restructure the company's organization to enhance future profits. In a normal transaction where Yum! Brands were selling its stock to another company, Yum! Brands would have a gain (or loss) on the appreciated (depreciated) value of the stock. However, Section 368 allows companies to meet certain conditions to defer the gain to a future period. Importantly, companies still have to recognize a gain on the stock's appreciated value, but this gain will not typically happen until the company ultimately disposes of it. In this case, Yum! Brands thought that the conditions under Section 368(a)(1)(B) were met, which would defer the gain, allowing the reorganization to make more sense from a financial perspective. In Yum! Brand's 2024 10-K financial statements, the company notes the following: As reported by Bloomberg Tax, this disagreement comprises over $4 billion dollars in damages: the $2.1 billion in taxes that the IRS believes Yum! Brands should have paid during their reorganization in 2014, $418 million in underpayment penalties and over $1.5 billion in interest on the money that has not yet been paid to the taxing authority. $4 billion is a large assessment for any firm. However, to put it into context, Yum! Brands in 2024 had a pre-tax income of $1.9 billion and paid income taxes of $414 million on that income. Thus, a tax bill of over $4 billion is astronomical for even a company of this size. NRN reports that the disagreement stems from Yum! Brands believe to have met all of the requirements under Section 368 for the reorganization to be tax-deferred, whereas the taxing authority believes that these matters were not all addressed and initiates billions of dollars of income by way of a sale of appreciated value of stock. NRN also reports that Yum! Brands has taken this matter to court and appeals court but was unsuccessful. In turn, Law360 reports that Yum! Brands have taken the IRS to court to sue them over the collections of this $4 billion. While the matter is still uncertain, many in the M&A tax space continue to watch this saga unfold since it represents a significant assessment being levied against some of the U.S.'s most recognizable restaurant brands.
Chicago Tribune
20 minutes ago
- Chicago Tribune
Castro to seek reelection to state Senate rather than make U.S. House bid
State Sen. Cristina Castro, D-Elgin, has announced she will seek reelection to her District 22 post rather than make a bid next year for the Congressional seat being vacated by U.S. Rep. Raja Krisnamoorthi. 'When I first entered public service, it was with a singular goal: to deliver for my community and make life better for the people of the 22nd District, who I've been lucky to call my neighbors for my entire life,' Castro said in a news release. 'Over the past eight years as state senator, I'm proud to have stayed true to that mission — delivering real results and championing the working families of my district. As I think about the future and how I can continue to make the biggest impact, that goal remains my North Star.' In addition to Elgin, Castro's district encompasses all or part of 10 communities in Cook and Kane counties. Her statement came the same week that state Rep. Anna Moeller, D-Elgin, also announced she also would seek reelection to the House instead of making a bid for Congress. Krishnamoorthi, who represents the 8th District in the U.S. House, has announced plans to run in the primary for the seat currently held by U.S. Sen. Dick Durbin, who plans to retire. Both he and Durbin are Democrats, as are two other candidates who have announced they're running for the job: Lt. Gov. Juliana Stratton and U.S. Rep. Robin Kelly, D-Matteson. Castro, elected to the state Senate in 2016, is the majority caucus whip for the 103rd General Assembly, chair of the Senate Executive Committee, and a member of the Latino Caucus, according to her website biography. She serves on the Appropriations, Energy and Public Utilities, Insurance, Labor and Revenue committees. Prior to being elected to the state Senate, she served on the Kane County Board from 2008 to 2016. Castro holds an associate degree from Elgin Community College and bachelor's and master's degree in business administration from Northern Illinois University.
UPI
22 minutes ago
- UPI
Mahmoud Khalil offers declaration, describes damages to his life
June 6 (UPI) -- Mahmoud Khalil, the Columbia University graduate detained by the Trump administration in March for deportation over his pro-Palestinian views, offered a public declaration that details what he's experienced since his arrest. In a case document filed Thursday, Khalil listed what he described as the "irreparable harms" he has suffered, which he claimed have affected several parts of his life that "include dignitary and reputational harm, personal and familial hardship, including constant fear for personal safety, continued detention, restrictions on my freedom of expression, and severe damage to my professional future." The declaration, which was made from inside the LaSalle Detention Center in Jena, La., where Khalil has been held since March 9, puts focus on the birth of his son, which happened during his incarceration. "Instead of holding my wife's hand in the delivery room, I was crouched on a detention center floor, whispering through a crackling phone line as she labored alone." Khalil described. "I listened to her pain, trying to comfort her while 70 other men slept around me. When I heard my son's first cries, I buried my face in my arms so no one would see me weep." Khalil described that the first time he saw his son was through a window, and the first time he held him was in an immigration courtroom, to which his wife had to travel ten hours to reach, with their newborn. "I speak to her as often as possible, but these conversations are not private, everything is monitored by the government," Khalil said, which makes it impossible for them to comfortably speak freely. "We leave so much unsaid, and that silence weighs heavily on both of us." Khalil said that not only has the situation been "devastating" for him, but that his wife has dealt with harassment since his arrest. Khalil further described the anguish of seeing Trump administration officials post statements and photos of him on social media that he purports as "accompanied by inflammatory language, grotesque and false accusations, and open celebration of my deportation." Khalil expressed concern for his future as well. He said he was hired by the nonprofit equality-focused Oxfam International group only days before his arrest as a Palestine and Middle East/ North Africa policy advisor, and was scheduled to start work in April, but the job offer was formally revoked. He says "I strongly believe" his arrest and continued detention is the reason for this. He added that should the charges against him stand, "the harm to my professional career would be career-ending." Khalil further worried his arrest would result in a lifetime of "being flagged, delayed, or denied when traveling, applying for visas, or engaging with consular authorities anywhere in the world," and not just him, but his wife and son. His mother had also applied for a visa in March to visit the United States to see their child be born, and although that was approved, the U.S. embassy returned her passport without a stamp, and now her case is under "administrative processing," and remains unapproved. Khalil's elderly father, whom he describes as "severely disabled," lives in Germany, and he ponders whether any country allied with the United States will ever grant him entry should the charges stand. Khalil detailed the allegations under which he has been held for deportation, which not only did he deny as testimony at his May immigration court hearing, at which he purports "The government attorneys did not ask me any questions regarding these issues." However, Khalil maintained his greatest concern of all is a determination by Secretary of State Marco Rubio based on a law that an "alien" can be deported should his presence in the United States "have potentially serious adverse foreign policy consequences." "I understand that the Rubio Determination is not only a ground for deportation, but it is also a bar to entry," said Khalil. "In other words, no matter what happens to the other charge against me, it is the Rubio Determination that will make this country, the country of my wife and child, a country I cannot return to in the future."
