White House Finalizes Rules On SMB Tax Break

The U.S. Department of the Treasury has finalized rules through which businesses will be able to take advantage of a new 20 percent tax deduction.

The deduction for pass-through businesses was part of the tax-cut legislation that President Donald Trump signed at the end of 2017. However, since the majority of American small businesses (SMBs) are organized as pass-throughs, as well as many financial and real estate companies, there needed to be clarity on which firms are actually eligible for the deduction. With this new regulation, for example, some mutual fund holders can now benefit from the deduction as long as they have holdings in a real estate trust.

The National Federation of Independent Business (NFIB) said the new regulation provides “needed certainty to small business owners,” said Brad Close, senior vice president of public policy and advocacy, according to The New York Times. “The vast majority of small businesses will enjoy the benefits of the full 20 percent deduction.”

In addition, rental property owners — even those who rent full-time on Airbnb  can claim the deduction, as long they keep certain records and perform 250 hours of services on the property each year. However, some of the country’s largest landlords are excluded because their tenants pay all real estate taxes, maintenance and building insurance. “I am very surprised they did what they did,” said Anthony J. Nitti, tax partner at Withum in Aspen, CO. “It creates this strange dichotomy.”

Nicole Kaeding, director of federal projects at the Tax Foundation in Washington, added that the new regulations could even lead to lawsuits.

“It is a generous deduction that encourages individuals to try and take advantage,” she said. “The IRS regulations could be perfect, and still, the beneficial tax treatment will ensure that accountants and attorneys will seek to [innovate] on new business structures and forms to maximize the deduction.”

Elon Musk Startup xAI Launches App Offering Access to Grok Chatbot

Elon Musk’s artificial intelligence (AI) startup xAI has launched a stand-alone consumer app called Grok that offers access to the company’s chatbot of the same name.

Grok Beta for iOS offers access to xAI’s latest model, Grok 2, for free, according to its description in Apple’s App Store.

“Grok is an AI-powered assistant, developed by xAI, designed to be maximally truthful, useful and curious,” the description said. “Get answers to any question, generate striking images, and upload pictures to gain a deeper understanding of your world.”

The app’s key features include image generation; real-time information powered by its access to current data from the web and Musk’s social media platform, X; an “engaging and humorous” conversational tone; and a focus on privacy, according to the description.

The chatbot was previously available only through X, The Wall Street Journal (WSJ) reported Thursday (Jan. 9). The new app is available for free and doesn’t seem to have a subscription option, according to the report. Its description in Apple’s App Store suggested the product was in beta and was being released in the U.S.

The launch of the Grok app followed the December launch of a free version of the chatbot for all users on X, as PYMNTS reported Dec. 15.

“Over the past few weeks we have been quietly testing a new version of the Grok-2 model, which is three times faster and offers improved accuracy, instruction-following and multilingual capabilities,” xAI wrote in a Dec. 12 blog post.

The post added that while the new version is available to all users on X for free, Premium and Premium+ users get higher usage limits and first access to any new capabilities.

On Dec. 23, xAI announced that it raised $6 billion in a Series C funding round to support its development of advanced AI systems.

“The funds from this financing round will be used to further accelerate our advanced infrastructure, ship groundbreaking products that will be used by billions of people, and accelerate the research and development of future technologies enabling the company’s mission to understand the true nature of the universe,” xAI said in a Dec. 23 blog post.