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Treasury Issues Highly-Anticipated Final 199A Regulations

January 22, 2019 199A Business & Tax Blog

The Treasury Department issued final regulations on January 18, 2019, on Code Section 199A and its 20 percent deduction against qualified business income. The final regulations make a number of significant changes to the proposed regulations, which were issued on August 16, 2018, and also provide a plethora of additional guidance. Some of the changes include (i) expansion of the aggregation rules for trades or businesses, (ii) addition of a rental real estate safe harbor, (iii) needed clarifications regarding the specified service trade or business rules, and (iv) favorable modifications to the determination of the basis of assets in computing the deduction.

We will be analyzing the 247-page final regulation package over the coming weeks and months and providing our insight to you in a series of blog posts.

View the final regulations.

View an advance version of Notice 2019—07, which contains a proposed revenue procedure regarding the rental real estate safe harbor.

Finally, view an advance version of Revenue Procedure 2019—11, which provides methods for calculating W-2 wages for purposes of the Code Section 199A deduction.

Michael J. Wilson