Article Date:
November 2019

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Will the Newly Released Section 199A Rental Safe Harbor Work for You?

Nothing stays the same in the tax world, and that’s especially true with your brand-new 20 percent Section 199A tax deduction.


In January 2019, the IRS gave you a proposed safe harbor to help you figure out whether your rentals qualified for the Section 199A deduction.


Now, nine months later, the IRS issued the final version of the rental safe harbor.


While the IRS kept the key safe-harbor requirements the same, there are several important changes you need to know.


We’ll tell you all about them (and how one change could impact your Section 199A deduction amount) when you read the article.


Big Picture on Rentals


Your rental activities qualify for the Section 199A deduction in one of three ways:



They are a tax code Section 162 trade or business.1


You rent them to a commonly controlled tax code Section 162 trade or business.2


They meet the Rev. Proc. 2019-38 safe harbor requirements.


The safe harbor is completely optional. Failure to meet the safe-harbor requirements doesn’t stop you from qualifying the rentals in one ... Log in to view full article.

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