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
Instructor
Greg White
Greg White, CPA, taught for 14 years as an adjunct professor for Golden Gate University. He’s admitted to practice before the United States Tax Court. He is a founder and shareholder, in WGN PS in Seattle, WA. He has been named a Top 50 IRS Representation Practitioner in the U.S. by CPA Magazine and has taught for a number of professional organizations. Greg enjoys the technical side of tax, but also likes to have fun in class.