On Friday night at 5:30 p.m., Republicans finally released their 1,097-page tax bill, including 503 pages of legislative text, to the public. The complex legislation impacts nearly the entire federal tax system and is not light reading. Votes are scheduled in the House and the Senate for early next week.

The legislation is the result of a conference committee between the House and the Senate, which had each passed their own tax bills. Typically, the conference will seek to resolve differences between the House and Senate version of the bill.

But the final tax legislation contains a brand-new provision that wasn’t included in the House or Senate bills. It benefits real estate developers like President Donald Trump and his family. The provision was first highlighted by the International Business Times.

The Republican tax legislation always provided a tax break for “pass-through” corporations, which is a type of corporation where the income is passed to the owners who pay personal income taxes on the money. The rationale for providing tax benefits to this kind of corporation, Republicans say, is that this is how many small businesses are set up.


In addition to lowering the tax rate for “pass-through” corporations, both the House and the Senate allowed corporations to deduct about 20 percent of this kind of income from all taxation. But how do you prevent everyone from declaring themselves a corporation to avail themselves of these new benefits? The House and Senate capped the availability of the deduction as a percentage of wages paid. In other words, you had to at least demonstrate that you were a real business employing people to receive this benefit.

The final legislation, however, includes a new way to qualify for this valuable deduction. You can qualify by paying wages or through owning property. This would benefit people who own businesses with large real estate holdings but few actual employees — a category that includes many businesses still owned by President Trump.

The provision is explained on page 561 of the document released Friday night:

The new provision benefiting real estate owners that was quietly added by Republicans on Friday night.

“This helps people who have held property for awhile, like Donald Trump. If you’ve got an LLC that’s a trade or business with a bunch of real estate holdings and few employees, [I] think you’re now golden. You get the deduction,” New York University law professor David Kamin told IBT.

Another big winner is likely Jared Kushner, Trump’s son-in-law and senior White House adviser, who is also in real estate. Sen. Bob Corker (R-TN) would also personally benefit from the new provision. Corker opposed the Senate version of the bill, citing deficit concerns, but announced his support for the final tax legislation, even though it has the exact same deficit impact.


Even prior to this new provision, the tax legislation was a love letter to the commercial real estate industry, as the New York Times explained earlier this month:

But when it came time to eliminate special breaks or impose tighter standards, real estate was generally excused from the room. Most businesses were hit with new limits on deductions for interest payments, but not real estate. Most industries lost the ability to defer taxes on the exchange of similar kinds of property, but not real estate. Domestic manufacturers and pharmaceutical companies lost some industry-specific breaks, like the tax credit for so-called orphan drugs, in exchange for lower rates. The real estate industry ended up with an even more generous depreciation timetable, allowing owners to shelter more income.

The exact impact on Trump’s taxes, of course, is not known. Breaking from decades of tradition, Trump has refused to release his tax returns.