News / Article

IRS Confirms Traders Are Eligible For QBI Deduction

Source: forbes.com - Jan 28, 2019

On Jan. 18, 2019, the IRS issued final 199A regs for the 2017 Tax Cuts and Jobs Act (TCJA) 20% qualified business income (QBI) deduction. The final regs update the August 2018 proposed/reliance 199A regs and confirm that QBI includes Section 475 ordinary income/loss for “traders in securities and commodities,” who qualify for trader tax status (Section 162 business expense treatment).

Based on our interpretation of TCJA and the proposed/reliance regs, we figured QBI included Section 475 ordinary income/loss, but it was uncertain. Our previous content, including version one of Green’s 2019 Trader Tax Guide, stated that QBI “likely” included Section 475 ordinary income/loss. We are glad to remove the word “likely” from new versions and updates. What was uncertain before is now satisfied.

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Category: General Business