Final “Corrected” Treasury Regulations Released on QBI Deduction

Posted · Add Comment

The Internal Revenue Service (IRS)  has released corrected final regulations on the new Qualified Business Income (QBI) deduction under Internal Revenue Code (IRC) section 199A. Included in these revised regulations are various corrections to the definition and computation of excess IRC section 743(b) basis adjustments, a correction to the description of a disregarded entity for purposes of IRC section 199A , and a number of other minor edits.

The final regulations are effective when published in the Federal Register. However, for tax years ending in calendar year 2018, taxpayers may rely on the final regulations (in their entirety) or the August 2018 proposed regulations (in their entirety).

The additional proposed regulations issued in January 2019 would apply to tax years ending after the date they are adopted as final. However, taxpayers may rely on the rules pending their finalization.

The QBI deduction promises to be a substantive compliance matter in the current income tax return filing season. While the proposed regulations (adopted almost wholly in the final regulations issued in January), as well as the final regulations themselves, shed light on a number of complex issues surrounding this new tax deduction, there remains within the tax planning community a number of gray technical aspects that have not been addressed to a degree of absolute clarity.

Please contact Bob Grossman or Don Johnston at 412-338-9300, should you have questions or comments.

GYF will be presenting a seminar about the QBI Deduction on 2-27-19

Click here for details and registration information.

Related Posts

GYF Tax Alert on Sec. 199A Pass-through Deduction

Qualified Business Income Deduction Clarified with the Release of Proposed Rules