IRS Issues Guidance on 20 Percent Pass-Through Deduction

By Chad Halstead, Katz Sapper Miller

It took a little over eight months, but the IRS has issued much-anticipated proposed regulations regarding the 20 percent pass-through deduction provided under Section 199A. The 184 pages of proposed regulations provide answers to some, but not all, of the questions considered since the Tax Cuts and Jobs Act (TCJA) was signed into law on Dec. 22, 2017. Since TCJA was enacted, tax advisors have counseled clients to 'stand your ground' and refrain from any radical structure modifications in response to the new provision. Those that heeded this advice will likely be thankful they did. Outlined below is a rundown of the top takeaways from the proposed regulations. But first, an exceptionally brief Section 199A refresher.

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