ProVision, PLC

Are rental real estate activities eligible for the qualified business income (QBI) deduction? The answer is a distinct “maybe.” This tax break allows eligible sole proprietors and owners of “pass-through” entities to deduct up to 20% of QBI. Pass-through entities include partnerships, S corporations and most limited liability companies. However, income from a rental real estate activity is QBI only if the activity rises to the level of a trade or business or meets an IRS safe harbor, which generally requires separate records, sufficient rental services and specific documentation. Various limits and other restrictions also apply.

The U.S. Dept. of the Treasury announced that the IRS plans to modernize Form 990, Return of Organization Exempt from Income Tax. The information form is generally filed by nonprofits. The revised form would require tax-exempt organizations to provide clearer reporting on certain activities. The planned changes are intended to improve transparency to help detect misconduct and hold wrongdoers accountable. The Treasury and the IRS expect to publish proposed regulations and solicit public comment before finalizing any reporting changes. The agencies will consider administrative feasibility and reporting burden as the proposal is developed.

📣 WEBINAR ALERT - ProVision's Tax Talk Live
📅 May 6, 2026 — 10AM PT / 12PM CT
🎙️ Hosted by CPAs, Scott Snow and Deni Baldwin
Join this insightful webinar about - Strategies for Rental Investors: Financing, Tax Planning & Loss Optimization
🔗 Link to Register: https://bit.ly/42GAxBp

ProVision, PLC

If you pay more than $10,000 in state and local taxes (SALT), such as property tax and state income tax, a 2025 tax law change could significantly reduce your federal income tax liability. For 2018–2024, the SALT itemized deduction was limited to $10,000. For 2025, you can deduct up to $40,000. But the deduction drops by 30% of the amount by which modified adjusted gross income (MAGI) exceeds $500,000; when MAGI reaches $600,000, the $10,000 cap applies. (Be aware that lower limits and thresholds apply to married taxpayers filing separately.) To maximize your deduction, you may want to take steps to keep your MAGI under the reduction threshold or accelerate property tax payments into 2025.