January 2019 Bar Bulletin
By James K. Treadwell
(Second of Two Parts)
Application to Real Estate Holding Companies
The purpose of this article is to demonstrate the application of IRC Section 199A in the context of a family, limited liability company which holds rental real estate as capital.1 As a real estate operation will clearly not fall within the definition of a Specified Service Trade or Business, the application of 199A will center around two factors:
• the entity’s (b)(2)(A) amount (20 percent of the entity’s net qualified business income, i.e., its QBI); and
• the entity’s (b)(2)(B) amount (the W-2 Wage Base/UBIA formula set forth in...