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Qualified Business Income

Level 1

I manage, and partially-own, two family S corps with 53% overlapping ownership.  The larger S corp is clearly in the real estate rental business with 30 tenants.  The other just has cash but plans to buy a rental property. 

Would the single-tenant S corp qualify as a business for purposes of the qualified business income deduction of section 199A?  What if it buys a NNN property, then would my involvement in the real estate business combined with the overlapping ownership put the single-tenant S corp in the real estate rental business too?  This is like driving in a blinding snowstorm.  Tax law sucks!

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3 Comments 3
Level 15

"Tax law sucks!"

That's why folks that spend their time learning it tend to want to be paid for their services rather than giving their time away for free.

Slava Ukraini!
Level 15

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Level 15

"What if it buys a NNN property"

Has no one ever told you and your shareholders about the pitfalls of buying and holding real estate by an S Corp?

It seems you now have another reason to seek out good local guidance, to see if all of that can be fixed.

"Level Up" is a gaming function, not a real life function.