Student Loan Payments as a Business Expense?

[Michael Wagner]

With the recent change in tax laws and businesses including sole props now being able to set up a 127 education assistance plan and deduct student loan payments as a business expense. 

I was wondering if this is available to rental properties owners as well?  Based on the research I have done my understanding is they would not be able to take advantage of these plans as it is passive income but I was hoping someone would be able to confirm that if this is their understanding as well or to help me in where I may be misunderstanding? 

https://assets.kpmg/content/da...

I have attached a link to an article for anyone not familiar with education assistance plans.

[Ashish Acharya]

Originally posted by @Greg O'Brien:

@Ashish Acharya isnt there a 127 discrimination rule for owners and attributed owners?, If you are a sole owner of an S corp and have no employees, that would violate the 5% rule I believe (correct me if Im wrong)!

No, you are not. Of course, all the requirements, including 5%, of the code have to be met.  Listing out here just so it's clear to all other readers. 

In order to meet the qualification rules for tax-free Section 127 educational assistance programs, all of the following must be met [IRC Sec. 127(b)]:

• a. The educational assistance program must be pursuant to a separate written plan of an employer for the exclusive benefit of employees [IRC Sec. 127(b)(1)].
• b. The program must benefit employees who qualify under a classification that does not discriminate in favor of highly compensated employees or their spouses and dependents [IRC Sec. 127(b)(2)].
• c. The program cannot provide more than 5% of benefits to a class of individuals who are shareholders or their spouses and dependents [IRC Sec. 127(b)(3)].
• d. The program cannot offer a choice between educational assistance and other forms of taxable compensation [IRC Sec. 127(b)(4)].
• e. Employees must be given reasonable notification of the availability and terms of the program [IRC Sec. 127(b)(6)].