Tax perk meant for mom-and-pop owners will instead benefit major property investors

Treasury Department has barred part-time property owners from being eligible for the benefit

TRD NATIONAL /
Jan.January 29, 2019 04:30 PM

(Credit: iStock)

Small-time real estate investors are being blocked from a tax break that was originally meant to benefit them.

The Treasury Department recently released final rules detailing how owners of businesses including limited liability companies can receive a deduction of up to 20 percent, according to Bloomberg. The law, which was part of 2017 tax reform, lets real estate firms claim the deduction in full, but bars part-time property owners from the benefit.

Part-time property owners are defined as those who spend less than 750 hours a year on their real estate business and those who rent buildings to tenants under triple-net leases, a common arrangement under which tenants pay their landlords for maintenance, insurance and property taxes along with utilities and rent.

Some Democrats have criticized the provision as geared toward helping the rich and several members of the Trump’s administration, including the president himself and his son-in-law Jared Kushner.

“It seems counter to the idea of allowing a tax break for small businesses,” Greenberg Traurig tax attorney Marvin Kirsner told Bloomberg. “A really big company isn’t going to have a problem with this.” [Bloomberg] – Eddie Small


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
A rendering of 1998 Second Avenue in Harlem and Peter Fine (Credit: GF55 Architects)

Peter Fine inks $70M construction loan for Harlem resi project

Peter Fine inks $70M construction loan for Harlem resi project
Andrew Florance, CEO of CoStar (Photo by Jeffrey MacMillan for the Washington Post)

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts
An institutional investor’s sale of a 7 percent stake in an exchange-traded real estate fund reveals deep concerns about the sector. (Credit: iStock)

Mystery investor dumps big stake in real estate fund

Mystery investor dumps big stake in real estate fund
Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off

Thor Equities’ big bet on Fulton Market is paying off
JPMorgan Chase's Jamie Dimon and Fortress Investment Group's Wes Edens (Dimon via Mark Wilson/Getty Images; Edens via Scott Olson/Getty Images)

JPMorgan, Fortress are the latest firms to build up war chests

JPMorgan, Fortress are the latest firms to build up war chests
CEO Andrew Florance (Credit: CoStar via YouTube)

CoStar buying Ten-X for $190M

CoStar buying Ten-X for $190M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...