Treasury Releases Proposed Regulations Confirming Qualified REIT Dividend 20 Percent Deduction Applies to Mutual Fund Shareholders

Today the Treasury Department released Proposed Regulations related to the 20 percent deduction for certain business income enacted in the 2017 tax reform bill. The Proposed Regulations confirm that the section 199A 20 percent deduction applies to Qualified REIT Dividends received by mutual fund shareholders. The timing of this guidance is significant for the preparers of Forms 1099-Div which are due to shareholders in a matter of weeks.

New box 5 on the 2019 Form 1099-Div is specifically designated for section 199A dividends, including Qualified REIT Dividends to direct REIT shareholders and which Treasury, through the Proposed Regulations, has now confirmed includes those mutual fund dividends that are properly treated as Qualified REIT Dividends.

Taxpayers may rely on the Proposed Regulations until final regulations are published. Nareit commends the Treasury Department and the IRS for releasing this helpful guidance that will allow millions of Americans, including people of moderate incomes, to obtain the tax deduction for REIT dividends as Congress intended.

(Contact: Cathy Barre at cbarre@nareit.com)

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