When Renting to a C Corporation Creates QBI

There’s one section of the tax code that can save you a lot of money.

I’m talking about Section 199A.

It lets you claim a valuable 20-percent qualified-business-income (QBI) deduction when you rent an office or other building to your personally owned C corporation.

But of course, since we’re dealing with the IRS, the devil is in the details. We’ll help you understand them when you read my new article titled Tax Tips: When Renting to a C corporation Creates QBI.

Three ways our fact-filled article can help you:

1. We’ll explain one key provision of the tax law you need to know. Yes. Renting a building to your C corporation qualifies for the 20-percent Section 199A deduction if the rental rises to the level of a Section 162 trade or business. Why is Section 162 so important? You’ll find out when you read the full article.
2. You’ll learn what happens if you or your spouse rents a building (that either one of you owns) to your S corporation. Good news. The rental automatically qualifies as a Section 162 trade or business. You’ll get full information when you read the full article.
3. We’ll explain a very important IRS rule. It’s important to remember that with the self-rental to a pass-through business like an S corporation, the QBI takes on the attributes of the tenant. This means, if you rent to an out-of-favor-specified service-trade or business (as defined by Section 199A), you must treat the rental as an out-of-favor-specified service-trade or business.Sound complicated?We’ll make everything clear when you read the full article.