Archive for January, 2019:

20% pass through deduction for Rental property income

Written on January 30th, 2019 by Jamesno shouts

The IRS has clarified the new tax law and its impact on rental properties.  Originally the wording stated that small businesses and REIT’s would get the 20% pass through but for owners of residential rental properties it was unclear.  They have now issued guidance and if you treat your properties like a business and spend over 250 hours annually on them (client service, collecting rent, repairs, etc) then you meet the safe harbor test to deduct 20% of net rental income from passing through to your tax return.

More info here:  https://www.irs.gov/pub/irs-drop/n-19-07.pdf

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