Treasury Secretary Steven Mnuchin said the Internal Revenue Service plans to close a loophole that hedge fund managers had been trying to exploit to avoid paying higher taxes on carried-interest profits.
Mnuchin told the Senate Finance Committee that a Bloomberg News story on Wednesday, which detailed how hedge funds created scores of shell companies to work around the new carried-profit rules, prompted him to instruct administration officials to issue guidance on the subject within two weeks.
“I’ve already met with the IRS and our Office of Tax Policy this morning as a result of that article,” Mnuchin told the committee. “Taxpayers will not be able to get that loophole.”
The new guidance would effectively kill hedge fund managers’ plans to create numerous shell companies in Delaware — corporate America’s favorite tax jurisdiction — to get around the tax law’s requirement that assets must be held for three years instead of one year to qualify for a lower tax rate.
Carried interest is the portion of an investment fund’s returns that are paid to hedge fund managers, private-equity players, venture capitalists and certain real estate investors.
Federal Communications Commission Chairman Ajit Pai called for the FCC to approve an application by Elon Musk’s SpaceX to provide broadband Internet via satellite.
“To bridge America’s digital divide, we’ll have to use innovative technologies,” Pai said in a statement. “Satellite technology can help reach Americans who live in rural or hard-to-serve places where fiber optic cables and cell towers do not reach.”
Pai said he asked his four fellow commissioners to support SpaceX’s application.
The approval would be the first given to a U.S.-based company to provide broadband services using a new generation of low-Earth-orbit satellite technology, Pai said.
The FCC said it has approved requests by OneWeb, Space Norway and Telesat Canada to access the U.S. market.
New engines made by Pratt & Whitney for the latest Airbus single-aisle jetliner, the A320neo, pose a potential shutdown risk, U.S. regulators said. The Federal Aviation Administration’s formal warning follows a similar action by European regulators Feb. 9, and cites a “knife edge seal fracture” in the engine that could lead to an engine stall “and consequent in-flight shutdown and rejected takeoffs,” the FAA said. A total of 98 engines could be affected, with 43 confirmed to have the problem, Pratt said, declining to comment further.
Uber’s full-year net loss widened to $4.5 billion in 2017 as the ride-hailing giant endured a tumultuous year with multiple scandals, a lawsuit alleging theft of trade secrets and the replacement of its chief executive. The results also showed that Uber cut its fourth-quarter net loss by 25 percent from the third quarter. The full-year loss grew from $2.8 billion in 2016. Gross revenue for the year rose 85 percent over 2016, to $37 billion. In the fourth quarter, Uber’s net loss was $1.1 billion, down from $1.46 billion it lost in the third quarter. Bookings from fares rose 14 percent to just over $11 billion for the quarter.
Sam’s Club is offering free shipping for premium members and simplifying its membership tiers. Starting Wednesday, the Walmart-owned warehouse club will give free shipping on online orders for Plus members on 95 percent of the items it sells. Previously, most shipping costs were based on the item’s size and weight, the shipping method and the delivery address. Sam’s Club is also converting its three membership plans to two. Sam’s Plus will still carry a $100 annual fee, while the Business and Savings plans will convert to Sam’s Club memberships with an annual fee of $45.
— From news reports
8:30 a.m.: Labor Department releases the producer price index for January.
9:15 a.m.: Federal Reserve releases industrial production for January.
10 a.m.: Freddie Mac releases weekly mortgage rates.
10 a.m.: National Association of Home Builders releases housing market index for February.
4 p.m.: Treasury releases international money flows data for December.