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Treasury and IRS Release Final Regulations on Sales by Foreign Persons of Certain Partnership Interests

On September 21, the Department of the Treasury and the Internal Revenue Service released final regulations under section 864(c)(8). Section 864(c)(8) generally treats gain from the sale or exchange by a nonresident alien individual or foreign corporation of an interest in a partnership that is engaged in a trade or business in the United States as effectively connected with such trade...

IRS Provides Final Guidance on Rental Real Estate Safe Harbor under Section 199A

The IRS recently released Rev. Proc. 2019-38, which provides a safe harbor for treating a rental real estate enterprise as a single trade or business for purposes of section 199A. Section 199A generally allows a deduction of up to 20% of the taxpayer’s qualified business income from each of its qualified trades or businesses. The safe harbor had originally been proposed by the IRS in...

Treasury Releases Final and Proposed GILTI Regulations and Temporary Section 245A Regulations

On June 14, Treasury and the IRS (the Service) released final and proposed regulations on the new global intangible low-taxed income provisions, or GILTI, that were introduced under the Tax Cuts and Jobs Act. Along with finalizing regulations related to determining a US shareholder’s GILTI inclusion and their pro rata share of a CFC’s subpart F income, the regulations also address the...

Single Entity Can Apply 199A De Minimis Rule Multiple Times, According to IRS Official

Speaking at the American Institute of CPAs Fall Tax Division Meeting in Washington, D.C. on November 14, IRS associate chief counsel Holly Porter stated that the section 199A de minimis test applied to identify specified service businesses could apply multiple times for the same entity if separate businesses are being operated.  Enacted by the Tax Cuts and Jobs Act (TCJA), section 199A...

IRS to Consider Changing Section 199A Aggregation Rules Based on Comments

IRS official Benjamin Weaver stated that the IRS is open to changing the aggregation rules set forth in the proposed section 199A pass-through deduction regulations since they are not “statutorily derived.” Weaver stated that the IRS has received numerous comments on the proposed regulations, particularly on the requirement that attributes of multiple businesses be aggregated at the...

IRS Releases Priority Guidance Plan for 2018-2019

On November 8, the IRS and Treasury Department released their priority guidance plan (PGP) for 2018-2019, which includes a number of projects concerning the implementation of the Tax Cuts and Jobs Act. Planned projects include finalizing regulations under sections 199A (the 20% deduction for qualifying business income) and 951A (global intangible low-taxed income) and issuing...

OIRA Receives Proposed Section 163(j) Regulations for Review

The Office of Information and Regulatory Affairs (OIRA) received draft proposed regulations under section 163(j), addressing the limitation on business interest deductions, on October 25, according to the Office of Management and Budget’s website. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally limits business interest expense deductions to the sum of business...

IRS Releases Opportunity Zone Guidance

On October 19, 2018, the IRS released proposed regulations (REG-115420-18) concerning opportunity zones (sections 1400Z-1 and 1400Z-2). Opportunity zones were created by the Tax Cuts and Jobs Act and allow tax benefits for investments in low-income communities, through what are termed qualified opportunity funds. Among other items, the proposed regulations provide taxpayers with...

House to Vote on Tax Reform 2.0 on Thursday and Friday

House Ways and Means Committee Chair Kevin Brady recently stated the House votes for Tax Reform 2.0 are scheduled to occur on Thursday and Friday. H.R. 6757, the Family Savings Act of 2018, and H.R. 6756, the American Innovation Act of 2018, are scheduled for votes on Thursday. H.R. 6760, the Protecting Family and Small Business Tax Cuts Act of 2018, is scheduled for vote on Friday....

Tax Reform 2.0 Will Likely Not Be Passed By Congress Before Midterms

House Ways and Means Committee Chair Kevin Brady recently stated that the three tax bills that together comprise the new tax reform package will likely not get through the Senate before midterm elections. The House Ways and Means Committee previously passed the bills through committee. The House is expected to vote the legislation later this month. Read More: Top House tax writer Kevin...

Tax Reform 2.0 Approved by House Ways and Means Committee

The House Ways and Means Committee approved the Tax Reform 2.0 package consisting of three bills. This overhaul package would make permanent the TCJA’s reduced rates for individuals along with several other provisions, including the $10,000 cap on the state and local tax (SALT) deduction, and the 20% deduction on certain pass-through business income.  A proposed amendment to repeal the...

Tax Reform 2.0 to be Marked Up This Thursday

According to its Chairman Kevin Brady, the House Ways and Means Committee will consider and mark-up “Tax Reform 2.0” legislation this Thursday. Released early last week, the Tax Reform 2.0 package consists of three bills to make permanent the individual tax cuts, pass-through provision under Section 199A and state and local tax (SALT) deduction cap added by the Tax Cuts and Jobs Act....

Section 168(k) Administrative Solutions Possible for QIP Error; Partnership Remedial Allocations

On August 16, the Senate Finance Committee sent a letter to Treasury clarifying the drafting error in the Tax Cuts and Jobs Act that failed to make qualified improvement property (QIP) eligible for 100% bonus depreciation under section 168(k). Ellen Martin, a tax policy adviser in the Treasury Office of Tax Legislative Counsel, commented that the letter was welcome but may not be...

Federal Register Publishes Proposed Passthrough Deduction Regulations

On August 16, 2018, the Federal Register published the Treasury and the IRS’s proposed passthrough deduction regulations. The regulations provide guidance on section 199A, which grants up to a 20% deduction for certain business income with respect to individuals and passthrough entities. The publication in the Federal Register begins the comment period for the proposed regulations, and...

Proposed Pass-Through Deduction Regulations Released

The IRS has released proposed regulations on section 199A, a provision added by the Tax Cuts and Jobs Act that provides a deduction for certain qualified business income with respect to individuals and pass-through entities. Read more: IRS issues proposed regulations on new 20 percent deduction for passthrough businesses; REG-107892-18.


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