From left, Rep. Carlos Curbelo (R-FL) R-Fla., Rep. Vern Buchanan (R-FL) and House Ways and Means Committee Chairman Kevin Brady (R-TX). Photo: J. Scott Applewhite / AP

House Republicans are six days away from unveiling the details of their tax plan, and just four days away from most GOP members getting to learn what's actually in it. But multiple sources familiar with the process say that there will indeed be proposed changes to the deductibility of corporate interest.

Why it matters: The move could eat into returns for many private equity and real estate investment funds, although the reduction won't be as deep as some had feared.

Specifics: The current talk is to reduce the current 100% deduction down to 70%, with an expectation that the extra 30% would be taxed at the new statutory corporate rate. There is an expectation that existing debt would be grandfathered in, and transition rules may include grandfathering for debt that is in process as of the Nov. 1 roll-out (if that last part proves out, expect a massive surge in leveraged loan soft launches).

Caveat: Interest deductibility is viewed by the GOP as one of its few remaining ways to pay for tax cuts, and the 70/30 plan was devised in concert with 401(k) caps. If the 401(k) plan gets scrapped over Trump's tweet threats, then it's possible the deductibility limit could climb.

Magic number is 25%: That's the statutory rate at which many LBO shops are said to believe the deducibility cuts would effectively balance out. Any lower (i.e., the floated 20%), then the private equity bigs view this as an overall win. Any higher, and returns will suffer.

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