Deduction for Sole Proprietors and Owners of Pass-Through Businesses

NAR successfully lobbied Treasury and IRS to clarify that the 20% deduction included in the Tax Cuts and Jobs Act of 2017 is effective in providing the maximum benefit permissible under the law for real estate professionals. Also following NAR discussions, IRS guidance provides a “safe harbor” of 250-hours of landlord-type activity per year to ensure that net real estate rental income qualifies for the deduction.