The Section 199A Deduction in the Tax Cuts & Jobs Act of 2017 offers a substantial break for qualified individuals and pass-through entities. However, the law itself is vague and ambiguous. The final regulations, revenue procedures and notices recently issued by the IRS provide definitive guidance. In this comprehensive, hands-on self-study webinar, an expert will:
- Guide you through the maze of rules and definitions to help you compute tax deductions and prepare the various tax forms, schedules and worksheets
- Help you apply the rules for rental real estate
- Provide you with the requirements and rules for aggregation, as well as specific examples illustrating compliance
- Explain definitions, computations and regulations for Specified Service Trades or Businesses (SSTB) relating to Section 199A
- Cover Computational and Reporting Rules for RPEs, PTPs, Estates and Trusts
- Share a host of planning strategies to help business owners and pass-through entities maximize the tax benefits
To provide accountants and tax professionals with an in-depth examination of Section 199A, and guidance on applying IRS final regulations and revenue procedures on computations and deductions of qualified business income for sole proprietors, partnerships, S corporation shareholders, qualified real estate investors, trusts and estates. This self-study webinar will also enable you to identify when rental real estate is entitled to the Section 199A deduction, and understand the proper application of aggregation.
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Treatment of rental real estate for Section 199A Deduction—Notice 2019-07
– Requirements to be treated as a trade or business
– Rental services
– Not rental services
– Excluded rental arrangements - In-depth analysis of the final Section 199A regulations
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Computing the Section 199A Deduction
– Formulas and examples - Reporting by flow-through entities
- Examination of definitions
- Negative QBI amount, netting and carryover rules
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W-2 wages and UBIA
– Who are employees for W-2 wages?
– Revenue procedure 2019-11 -
Unadjusted basis immediately after acquisition of qualified property
– Improvements to qualified property
– Not qualified property
– Depreciable period
– Like-kind exchanges/involuntary conversions - QBI, qualified REIT dividends and qualified PTP income
- Allocation of items among directly conducted trades or businesses
- Aggregation requirements, rules and examples
- Required tax return disclosure
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Specified service trades or businesses
– Review of examples explaining definitions and computations
– Effect of being an SSTB
– Trade or business of performing services as an employee
– Presumption that former employees are still employees - Trading in securities, commodities and partnership interests
- Trade or business where principal asset of such trade or business is the reputation or skill of one or more employees or owners
- SSTB de minimis rule
- Services or property provided to an SSTB
- 50% or more common ownership
- Non-calendar RPEs
- RPE, PTP, estate and trust computational and reporting rules
- Grantor and non-grantor trusts and Section 199A
- Electing Small Business Trusts (ESBTs)
• Recognize Congress’ overall methodology towards equalizing corporate and pass-through entity tax rates
• Identify the effective rate of pass-through income to an individual in the top income tax bracket
• Identify the period in which, absent further Congressional action, the Section 199A deduction will be available to qualifying taxpayers
• Identify those entities with income qualifying for the Section 199A deduction
• Recognize rental real estate qualifying as a Section 162 trade or business
• Recognize rental real estate enterprises meeting the safe harbor notice of Notice 2019-07
• Recognize the implications of properties leased on a triple net basis
• Identify the layout of the final Section 199A regulations
• Identify those items taken into account when computing qualified business income
• Recognize the implications of the applicable thresholds of taxable income as they determine the availability of the Section 199A deduction
• Recognize those wages included in the determination of wages for purposes of the Section 199A deduction
• Recognize property included in the determination of Unadjusted Basis Immediately after Acquisition (UBIA)
• Recognize the anti-abuse mechanics in preventing taxpayers from artificially increasing their Section 199A deduction through the year-end purchase of qualified property
• Identify the applicable depreciable period in which property will qualify for inclusion in the Section 199A calculation
• Identify allowable allocation methods for items of QBI that are properly attributable to more than one trade or business
• Recognize the role of qualified REIT dividends and qualified PTP income in calculating a taxpayer’s combined QBI
• Identify the ownership thresholds allowing the aggregation of businesses for purposes of the Section 199A deduction
• Identify the circumstances under which trades or businesses may be aggregated for purposes of Section 199A
• Recognize the period under which a taxpayer may not aggregate trades or businesses that are disaggregated by the IRS for purposes of calculating the Section 199A deduction
• Identify the various fields of specified and non-specified trade or businesses
• Identify those taxpayers who would and would not be concerned with the status of their pass-through income as non-specified service trade or business or specified service trade or business
• Recognize those circumstances under which the presumption of being in the trade or business of performing services an employee may be rebutted
• Identify the types of services that are and are not considered to be specified service trades or businesses
• Recognize the threshold at which a business with both non-specified and specified business revenue streams may maintain its status as a non-specified trade or business
