Sec. 199A A to Z: A Comprehensive Approach to the Biggest Tax Break in Decades
Author: Greg White
| CPE Credit: |
8 hours for CPAs
8 hours Federal Tax Law Updates for EAs and OTRPs
8 hours Federal Tax Updates for CTEC |
We’ll take a comprehensive, deep dive into the final regulations and the real estate “safe harbor” provided in Revenue Procedure 2019-38.
Coverage will include qualification of real estate under triple net leases, specified service trades or businesses, aggregation of real estate rentals, maximizing §199A when selling a business, strategies for maximizing the UBIA (property factor) and W-2 wages.
We’ll put SSTBs (like doctors, lawyers, consultants, etc.) “under the microscope” with a deep exploration of the SSTB rules. We’ll also cover many thorny issues:
• Is QBI reduced by charitable contributions a partnership or S corp makes?
• Do LLC members have to receive a “reasonable amount” of guaranteed payments for services?
• Does the rental of a single piece of property qualify for the §199A deduction?
• What do recently released IRS “Frequently Asked Questions” tell us about §199A?
• How do passive loss carryovers affect QBI?
• Should your clients with rental properties be issuing Forms 1099 to service providers (like plumbers)?
This course is excluded from the following subscription programs:
Value Pass, Self-Study Package, Webinar Package, Self-Study & Webinar Package, and Firm Package.
Publication Date: December 2020
Designed For
New and experienced CPA’s who practice in the tax area or who need a better understanding of the tax law for other areas of practice.
Topics Covered
- Why Do We Have the QBID?
- QBID: Overview
- Phase In of Wage Requirements: High”Income Taxpayers
- Taxable Income
- Ground Rules and General Limitations (Affect All Taxpayers)
- AICPA Nudges IRSL Schedule 1 Deductions
- Passive Owners
- Loss Carryovers
- 20% of Ordinary Taxable Income Cap: All Taxpayers
- Basis, At”Risk and Passive Carryovers
- Planning: Guaranteed Payments
- Sale of a Business
- QBID for §751 Recapture
- Introduction: Wage Planning
- Looking Ahead: The Future of Social Security
- Wrapping it Up—Background and Planning
- Rental Real Estate (Affects All Taxpayers)
- Do RE Rentals Qualify for QBID?
- Triple Nets: Who Calls the Plumber?
- Clearing the Fog: Triple Net Leases and the 2nd Circuit
- Revenue Procedure 2019”38 — Safe Harbor
- Rentals and 1099s
- Ambiguity: It's a "Two”Edged" Sword
- Wage and Property Limits (Affect Higher Income Only)
- First, Loss Netting
- QBID Cap: Wages and Property
- W”2 Wages
- Property Factor
- Wage and Property Caps: Business”by”Business
- Breaking Free of the "Business”by”Business" Limit Aggregation
- When Aggregation Hurts Taxpayers
- Introduction: Wage Planning (Higher Income)
- SSTBs: Specified Service Trades or Business (Affects Only Higher Income)
- Estates and Trusts: QBID
Learning Objectives
- Identify basic calculation of the 20% qualifying income business deduction ("QBID")
- Identify the QBID limits that apply to higher income taxpayers
- Recognize and apply the safe harbor for rental real estate (we'll provide a sample notice you can use in your practice)
- Recognize rental real estate not qualifying for the safe harbor, determine qualification for the QBID
- Determine whether clients are engaging in Specialized Service Trades or Businesses ("SSTB's)
- Calculate the taxable income cap on the QBID that applies to all taxpayers
- Compute the QBID arising from a medical practice in the context of a high-income doctor
- Identify situations where sole proprietor status (or a single member LLC) would be a better tax option than an S corp
- Recognize which type of business is required to pay reasonable compensation
- Describe UBIA thresholds and how they apply
Level
Update
Instructional Method
Self-Study
NASBA Field of Study
Taxes (8 hours)
Program Prerequisites
Basic understanding of Section 199A.
Advance Preparation
None
