From OMA Connections Partner Clark Schaefer Hackett: “The Tax Cuts and Jobs Act contains a provision under IRC Section 199A that provides a 20 percent Qualified Business Income Deduction to individuals (subject to limitations). But what does this mean at the entity level?
“On August 8, 2018, the IRS issued much-anticipated Proposed Regulations 1.199A-1 through 1.199A-6, clarifying some of the murkier issues in IRC Section 199A. Much of the guidance is meant for individuals subject to the deduction. However, Proposed Regulation 1.199A-6 also contains the provision that Relevant Passthrough Entities (RPEs) must report pertinent Section 199A information to owners on or within Schedule K-1. This information includes each owner’s share of items, such as Specified Service Trade or Business (SSTB) status, Qualified Business Income (QBI), W-2 Wages, and the Unadjusted Basis Immediately after Acquisition (UBIA) of qualified property. Let’s look at each of the required items separately for a few of the issues that can arise.” 8/23/2018