New Regs for Section 199A

[Terry D EA]

The IRS just released the following document regarding section 199A. It does address the rental property issue regarding rising to the level of a trade or business and the safe harbor. Also, gives better definition of dividend capital gains used for QBI. Long read but maybe worth it.

https://www.irs.gov/pub/irs-drop/td-reg-107892-18-corrected.pdf

[EricF]

I agree that the regulations are worth being familiar with.  However, this latest release does not provide additional information about rental property or REIT dividends.  This information was in the regulations released earlier.

[Terry D EA]

It did give the same information. It did appear to me that the items surrounding the safer harbor were a little more definitive. Still no real confirmation on rentals rising to the level of a trade or business. I am still standing on the safe harbor or sec162 for some of my clients. For others that do not participate at all, then no deduction and they do not meet the requirements under section 162.

[DANRVAN]

9 hours ago, EricF said:

I agree that the regulations are worth being familiar with.  

Both the prop reg released in August and the final version released last week are well written  and have excellent examples.  I took the time a couple months ago to read through the proposed reg and work through the examples. Working through the examples was a  great learning tool for me.

The real meat of the final reg are the operational rules starting on page 156.  There is a table of contents starting on page 151 which makes it easy to navigate through the operational rules.