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FY2023 budget includes proposals affecting accounting methods

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The proposals would also impact how taxable income is calculated.

The President's FY2023 budget includes proposals that would affect how certain income and deductions are calculated for federal income tax purposes, such as the new undertaxed profits rule and tax incentives for locating jobs in the United States. Subject to exceptions, the proposals are generally effective in tax years beginning after December 31, 2022.

Examples of proposals that would have federal income tax implications include the corporate income tax rate increase (from 21% to 28%), replacing BEAT with an undertaxed profits rule, offering tax incentives for locating jobs in the United states, imposing a minimum tax on individual taxpayers whose wealth exceeds $100m, repealing deferral of gain from like-kind exchanges, recapturing gain on IRC Section 1250 property, and foreign exchange gain or loss rules for individuals, among others.


The budget proposals generally focus on increasing both revenue and the progressivity of federal tax provisions, with particular focus on increasing rates for corporations and high net-worth individuals, as well as certain property transactions.

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