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.
