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Your Partners for Success Since 1977

by Cortney Chandler

The wait is over! The IRS just released the final 199A Qualified Business Income (QBI) deduction regulations along with safe harbor rules for real estate rentals.  Some key take-aways to note are:

  1. These documents provide clarity on several issues regarding QBI.
  2. Safe harbor sets 250 hours of service threshold and documentation requirements.
  3. Section 754 step ups (caused by a sale of a partnership interest or death of a partner) will be treated as qualified property in the calculations.
  4. Triple net leases are excluded from the safe harbor, but may still qualify for QBI under limited circumstances.

Give us a call at (408) 942-6888 to discuss how this impacts your rental property.

To view the articles provided by the IRS, follow the links below:

Notice 2019-17 (Revenue procedure for safe harbor)

https://www.irs.gov/pub/irs-drop/n-19-07.pdf

199A Regulations

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

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