Real Estate and Construction Newsletter September 2018
Proposed QBI Regulations Clear up Confusion for Sole Proprietors and Pass-Throughs
Since the Tax Cuts and Jobs Act (TCJA) was passed in December 2017, there has been much speculation about how the new tax law would impact businesses. TCJA permanently lowered the tax rate for corporations to 21% while rates typically remained higher for individual taxpayers. To level the playing field for sole proprietors and owners of pass-through businesses, Congress introduced the 20% Qualified Business Income (QBI) deduction.
This new deduction raised a number of questions for taxpayers and practitioners, but early last month Congress issued proposed regulations to address these questions.