Real Estate Rental and the Code Sec. 199A Deduction

This Article provides a detailed discussion of the applicability of the Code Sec. 199A enacted by the 2017 Tax Act deduction to a rental real estate activity, in light of the final regulations under Code Sec.199A published by the United States Department of Treasury on February 8, 2019, and safe harbor concepts for rental real estate enterprises under Notice 2019-07.  It explores the factors for determining whether the income arising from rental real estate activity meets the “trade or business” requirement for the Code Sec.199A deduction.  As concepts contained in Notice 2019-07 have not been formally issued by the IRS as an official revenue procedure, please contact us to check on any updates.