Terry D EA Posted September 26, 2019 Report Share Posted September 26, 2019 We all tossed this around last season and if you were like me, I processed returns for rental clients claiming the sec 199A because they met all of the conditions and it was unclear as to whether this activity would qualify as a trade or business. I relied on a lot of discussion and other codes sections to support my position should one of my client's get questioned. Now, the IRS has released revenue procedure 2019-38 clarifying that rental activities do qualify as a trade or business for the purposes of section 199A. Attached is the pdf of the procedure. I know some folks don't like opening attachments. I can post the entire document if anyone needs me to. Rev 2019-38.pdf 1 Quote Link to comment Share on other sites More sharing options...
Lee B Posted September 26, 2019 Report Share Posted September 26, 2019 For the most part, all this does is make the previously proposed regs permanent. So I don't think it provides much more clarity. I did notice one change that will very useful to some clients. The proposed safe harbor did not allow commercial and residential rentals to be combined when a client tried to meet the 250 hour safe harbor threshold. This has been changed to allow clients to combine commercial and residential rentals together. 1 Quote Link to comment Share on other sites More sharing options...
Max W Posted September 26, 2019 Report Share Posted September 26, 2019 It can be read here. Have fun! https://www.irs.gov/pub/irs-drop/rp-19-38.pdf Quote Link to comment Share on other sites More sharing options...
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