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Submitted By: someone
Answered: January 5, 2020 10:14 pm
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).
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Tax Glossary
Capital expenses
Costs that are not currently deductible and that are added to the basis of property. A capital expense generally increases the value of property. When added to depreciable property, the cost is deductible over the life of the asset.
