The IRS announced late last week that guidance on Section 199A should be issued by the end of this month (likely means sometime in July). We have been eagerly awaiting this guidance we hope it may provide needed answers to some of the following questions:
- What is a trade or business? Does rent income paid by a farmer to his/her LLC/LP, etc. qualify for the 20% deduction?
- How does an entity treat one or more qualifying businesses? Are they combined and separately allocated?
- Will they provide more details on what wages qualify?
- Will they provide details on how reasonable compensation applies to S corporations and partnerships (hopefully the dreaded 70/30 does not rear its head)?
- How will they treat bulk sales of property for purposes of the limitation on Section 199A?
There are likely several other questions that need to be addressed but these are some of the most important ones to myself and most of our readers. We will keep you posted when we get the guidance.