Sole proprietorship & New tax law

1 Reply

Hi all, 

My understanding of the new tax law is that it gives a 20% across the board deduction to landlords who are running their business as a recognized passthrough entity (LLC, sole proprietorship, etc.). I have no interest in filing for LLC and doing all the additional reporting and legwork that requires so my plan was just to list myself as a sole proprietor, since my wife is/will not be involved in running any rental properties we acquire.

I just purchase my first investment property - My question is, if I list both myself and my wife on the title for the house (the mortgage is in my name only), can I still be considered a sole proprietor for tax purposes?  Has anyone run into this before?   I definitely will talk to a CPA (if anyone has any recs in the DC area please PM me), but thought I'd get a general idea first. 


Probably the more important question is whether passive rental real estate activities (I will assume yours is passive) will qualify under the new law as a trade or business. As far as I know nothing truly definitive or authoritative has been released by Treasury answering that specific question, although the question itself has been presented to them by various groups seeking clarification.

You might ask your attorney or cpa specifically in regard to the titling question, but I doubt it would be a problem assuming the new law in fact does cover passive rental real estate activities.