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131 STAT. 2067 PUBLIC LAW 115–97—DEC. 22, 2017 or dealing in securities (as defined in section 475(c)(2)), partnership interests, or commodities (as defined in section 475(e)(2)). ‘‘(3) EXCEPTION FOR SPECIFIED SERVICE BUSINESSES BASED ON TAXPAYER’S INCOME.— ‘‘(A) IN GENERAL.—If, for any taxable year, the taxable income of any taxpayer is less than the sum of the threshold amount plus $50,000 ($100,000 in the case of a joint return), then— ‘‘(i) any specified service trade or business of the taxpayer shall not fail to be treated as a qualified trade or business due to paragraph (1)(A), but ‘‘(ii) only the applicable percentage of qualified items of income, gain, deduction, or loss, and the W– 2 wages and the unadjusted basis immediately after acquisition of qualified property, of the taxpayer allo- cable to such specified service trade or business shall be taken into account in computing the qualified busi- ness income, W–2 wages, and the unadjusted basis immediately after acquisition of qualified property of the taxpayer for the taxable year for purposes of applying this section. ‘‘(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the term ‘applicable percentage’ means, with respect to any taxable year, 100 percent reduced (not below zero) by the percentage equal to the ratio of— ‘‘(i) the taxable income of the taxpayer for the taxable year in excess of the threshold amount, bears to ‘‘(ii) $50,000 ($100,000 in the case of a joint return). ‘‘(e) OTHER DEFINITIONS.—For purposes of this section— ‘‘(1) TAXABLE INCOME.—Taxable income shall be computed without regard to the deduction allowable under this section. ‘‘(2) THRESHOLD AMOUNT.— ‘‘(A) IN GENERAL.—The term ‘threshold amount’ means $157,500 (200 percent of such amount in the case of a joint return). ‘‘(B) INFLATION ADJUSTMENT.—In the case of any tax- able year beginning after 2018, the dollar amount in subparagraph (A) shall be increased by an amount equal to— ‘‘(i) such dollar amount, multiplied by ‘‘(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2017’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof. The amount of any increase under the preceding sentence shall be rounded as provided in section 1(f)(7). ‘‘(3) QUALIFIED REIT DIVIDEND.—The term ‘qualified REIT dividend’ means any dividend from a real estate investment trust received during the taxable year which— ‘‘(A) is not a capital gain dividend, as defined in section 857(b)(3), and ‘‘(B) is not qualified dividend income, as defined in section 1(h)(11). VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00015 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS