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131 STAT. 2066 PUBLIC LAW 115–97—DEC. 22, 2017 ‘‘(ii) included or allowed in determining taxable income for the taxable year. ‘‘(B) EXCEPTIONS.—The following investment items shall not be taken into account as a qualified item of income, gain, deduction, or loss: ‘‘(i) Any item of short-term capital gain, short- term capital loss, long-term capital gain, or long-term capital loss. ‘‘(ii) Any dividend, income equivalent to a dividend, or payment in lieu of dividends described in section 954(c)(1)(G). ‘‘(iii) Any interest income other than interest income which is properly allocable to a trade or busi- ness. ‘‘(iv) Any item of gain or loss described in subpara- graph (C) or (D) of section 954(c)(1) (applied by sub- stituting ‘qualified trade or business’ for ‘controlled foreign corporation’). ‘‘(v) Any item of income, gain, deduction, or loss taken into account under section 954(c)(1)(F) (deter- mined without regard to clause (ii) thereof and other than items attributable to notional principal contracts entered into in transactions qualifying under section 1221(a)(7)). ‘‘(vi) Any amount received from an annuity which is not received in connection with the trade or business. ‘‘(vii) Any item of deduction or loss properly allo- cable to an amount described in any of the preceding clauses. ‘‘(4) TREATMENT OF REASONABLE COMPENSATION AND GUARANTEED PAYMENTS.—Qualified business income shall not include— ‘‘(A) reasonable compensation paid to the taxpayer by any qualified trade or business of the taxpayer for services rendered with respect to the trade or business, ‘‘(B) any guaranteed payment described in section 707(c) paid to a partner for services rendered with respect to the trade or business, and ‘‘(C) to the extent provided in regulations, any payment described in section 707(a) to a partner for services ren- dered with respect to the trade or business. ‘‘(d) QUALIFIED TRADE OR BUSINESS.—For purposes of this sec- tion— ‘‘(1) IN GENERAL.—The term ‘qualified trade or business’ means any trade or business other than— ‘‘(A) a specified service trade or business, or ‘‘(B) the trade or business of performing services as an employee. ‘‘(2) SPECIFIED SERVICE TRADE OR BUSINESS.—The term ‘specified service trade or business’ means any trade or busi- ness— ‘‘(A) which is described in section 1202(e)(3)(A) (applied without regard to the words ‘engineering, architecture,’) or which would be so described if the term ‘employees or owners’ were substituted for ‘employees’ therein, or ‘‘(B) which involves the performance of services that consist of investing and investment management, trading, VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00014 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS