Passed into law on December 22, 2017, new IRC Section 199A provides taxpayers an opportunity to take a deduction of up to 20% of their income from a US trade or business. Commonly known as the QBI deduction, this deduction applies to income from sole proprietorships, partnerships, S corporations, trusts and estates. Tax professionals and their clients have been waiting anxiously for the IRS to issue regulations expanding on various issues related to the 199A deduction. With the issuance of these proposed regulations, their wait is finally over.
The proposed regulations cover the following issues related to the QBI deduction:
The proposed regulations will not be considered final until publication in the Federal Register, however, taxpayers can rely on these proposed regulations until finalized. Detailed analysis of the various provisions of the proposed regulations will be forthcoming and will explore the various provisions and apply these regulations to various taxpayer situations.
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