On Aug. 8, the IRS and Department of Treasury released guidance regarding the implementation of the pass-through deduction created by the Tax Cuts and Jobs Act of 2017, which was enacted into law in December 2017. This proposed regulation is intended to provide clarity surrounding the 20 percent deduction on qualified business income pass-through businesses now can claim.
Upon initial review and discussions with NRCA's expert consultant, NRCA views the guidance as generally positive, fair and in accordance with the deduction's purpose and believes it will be valuable for NRCA members who can use it.
In anticipation of this guidance, NRCA's Washington, D.C., team participated in meetings with the Department of Treasury and Office of Management and Budget to advocate on behalf of NRCA members' best interests. Specifically, NRCA requested the guidance allow aggregation or "grouping" of multiple legal entities for the purposes of calculating the pass-through deduction to maintain the integrity of the deduction, regardless of how such entities are organized for non-tax related business purposes. NRCA is pleased to see its voice was heard as the guidance allows for such aggregation.
For more information regarding why allowing aggregation maintains the integrity of the deduction, view a coalition letter to the Treasury Department and IRS that NRCA signed outlining this request.
To view the coalition's statement regarding the release of these proposed regulations, click here.
For more information regarding this proposed regulation, click here and/or consult a tax professional.
