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).

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Tax Glossary

Tax home

The area of your principal place of business or employment. You must be away from your tax home on a business trip to deduct travel expenses.

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