Federal tax alert: Proposed regulations issued for the 20 percent Qualified Business Income Deduction
One of the most significant aspects of the Tax Cuts and Jobs Act (TCJA) was the creation of a new deduction in Section 199A, the qualified business income deduction (QBID). This deduction is claimed by individuals, trusts, and estates and is equal to up to 20 percent of qualifying domestic business income from S corporations, partnerships, and sole proprietorships.
As taxpayers and their advisors have sought to understand this new deduction, many interpretational questions have arisen. The Treasury Department and IRS have now provided the first round of tentative answers in the form of proposed regulations and a proposed revenue procedure.
Read our full alert for a summary of key takeaways.