As virtually everyone knows by now, Congress passed and the President recently signed a comprehensive overhaul of the U.S. tax laws at the end of 2017. While all of the details are still being analyzed (the final bill was in excess of 1,100 pages) and we await clarification from the IRS on how several of the provisions can be applied in specific situations, there are some broad takeaways that we can already deduce from the new bill.
One of the more significant provisions for several people, including real estate investors, falls under the “Deduction for qualified business income of pass-thru entities” subsection. I’ve attached a recent article from the SF Chronicle below, which does a nice job explaining the new provisions and their potential application to real estate investors. While the pass-through provisions are complex and we are awaiting new IRS regulations concerning their determination, it is already clear that the new deduction will benefit many who fall within its scope and the income criteria.