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

(Credit: iStock)
(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.

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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