IRS released final 199A regulations and safe harbor rules for rentals
by Cortney Chandler
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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:
- These documents provide clarity on several issues regarding QBI.
- Safe harbor sets 250 hours of service threshold and documentation requirements.
- 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.
- 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