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, 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. You’ll also have the opportunity to pose your questions for answers to your specific challenges.
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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
– Non-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