Submitted By: someone
Answered: January 5, 2020 10:14 pm

Is income from a sole proprietorship that holds rental real estate eligible for the 20%qualified business income deduction?

The qualified business income deduction applies only to a trade or business. Under an IRS-created safe harbor, a rental real estate activity may be treated as a trade or business for purposes of this deduction. Details of this safe harbor are in IRS Revenue Procedure 2019-38 (https://www.irs.gov/pub/irs-drop/rp-19-38.pdf).

advertisement
Tax Glossary

Investment in the contract

The total cost investment in an annuity. When annuity payments are made, the portion allocable to the cost investment is tax free.

More terms