IRS Issues Investment Company Pass-Through Write-Off Rules (3)

Shareholders of vehicles known as regulated investment companies can now get a better idea of whether they qualify for—and how to compute—a deduction for pass-through business owners.

The IRS released final rules (T.D. 9899) Wednesday for how the tax law’s 20% deduction works for regulated investment companies, many of which are mutual funds, that receive dividends from real estate investment trusts.

The final rules adopt several parts of a proposed version. The write-off must be reduced by losses or deductions that are partially disallowed in the same tax year, for instance, as well as “conduit treatment”