Today, the Treasury Department released final regulations related to the 20% deduction for certain business income enacted as part of the legislation known as the Tax Cuts and Jobs Act in 2017, Pub. L. No. 115-97. The Final Regulations finalize the conclusion of the proposed regulations that the section 199A 20% deduction applies to Qualified REIT Dividends received by mutual fund shareholders. The IRS also issued a press release regarding the final regulations.
The conclusions reached in both the proposed and final regulations were consistent with the recommendations made in Nareit's Oct. 1, 2018 comment letter and the April 9, 2019 joint comment letter submitted by Nareit and the trade association for the mutual fund industry, The Investment Company Institute (ICI). Nareit commends the Treasury Department and the IRS for finalizing this helpful guidance that will continue to allow millions of Americans, including people of moderate incomes, to obtain the tax deduction for REIT dividends as Congress intended.
Please contact Dara Bernstein, Nareit's Senior Vice President & Tax Counsel, at dbernstein@nareit.com with any questions.