If you are an owner of rental real estate, there is a newly proposed revenue procedure by the IRS to alleviate the uncertainty about whether or not a rental real estate activity is eligible for the qualified business income deduction. The deduction could reduce taxable income of the taxpayer by 20% of qualified business income, which is generated through a partnership, S corporation or sole proprietorship.
There are a number of considerations and rules to review in order to determine whether or not you qualify for the 20% deduction. These include such things as the type of business services you provide; whether or not you meet safe harbor provisions; lease agreements; and the need to provide a signed statement which claims the qualified income deduction or passes through the qualified business income deduction information.
You can read more details about the guidance [here]. Or, if you own rental real estate and want to know if you qualify for the qualified business income deduction, please email your PGCO tax professional, contact us or call 401-831-0200.