Rental Real Estate Section 199a

The Internal Revenue Code Section 199a Qualified Business Income (QBI) Deduction provides owners of pass-through entities the chance to significantly lower their tax bill by allowing them to take a deduction equal to 20% of their business income. This tax law was created as part of the Tax Cuts and Jobs Act, and ever since it was passed in December of 2017, owners of rental real estate businesses questioned whether they would be eligible for the deduction. Fortunately, when the 199a regulations were finalized in January of this year, the IRS simultaneously released Notice 2019-07. Section 6 of this notice sets forth a proposed revenue procedure that will help owners of rental real estate businesses assess their QBI Deduction eligibility.