Partnership Activity Aggregation Rules: Claiming QBI Deduction, W-2 Wages and Income Tests, Avoiding Disallowances

Specified Service Trades or Businesses Excluded From QBI Treatment, Impact of Existing Grouping Rules Under the IRC

A live 90-minute premium CLE/CPE webinar with interactive Q&A


Thursday, August 13, 2020

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, July 17, 2020

or call 1-800-926-7926

This webinar will provide tax counsel and advisers an in-depth analysis of the rules governing permissible activity aggregation among multiple pass-through activities for purposes of calculating the 20% pass-through deduction for partnerships and pass-throughs. The panel will detail the Service's position on specified service trades or businesses (SSTBs) excluded from QBI treatment, existing grouping rules found elsewhere in the Code, and discuss aggregation strategies to maximize the deduction.

Description

The QBI deduction continues to provide complexities for pass-through entities, particularly in the area of how owners can elect to aggregate or combine their trades or businesses for purposes of calculating and claiming the pass-through deduction. Tax counsel must understand the application of complex rules on SSTBs and the standards for aggregating activities that would receive QBI treatment.

QBI is the net amount of qualified items of income, gain, deduction, and loss concerning any pass-through entity subject to certain limitations, specifically in regards to SSTBs. The IRS issued guidance on what constitutes an SSTB ineligible to claim the deduction, which posed some uncertainty in applying a "principal asset" test for determining whether the primary business asset is the reputation or skill of the principal or key employees.

The regulations also go into significant detail on the permissible aggregation of activities for purposes of meeting the W2 wage test. Critical to determining whether a partnership with multiple business lines may combine those activities is understanding the anti-abuse rules restricting the use of "crack and pack" structures in an attempt to avoid SSTB restrictions.

Listen as our expert panel goes beyond the basics to offer practical guidance on the Section 199A aggregation rules for QBI calculations and eligibility as well as designing aggregation strategies to maximize pass-through deductions.

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Outline

  1. In-depth analysis of Section 199A
  2. Clarifications on SSTB
  3. Partnership activity aggregation rules
  4. Benefits of aggregating trades or businesses
  5. Computation and treatment of deductions
  6. W2 wage and income rules
  7. Special consideration for real estate pass-through entities

Benefits

The panel will discuss these and other essential questions:

  • Unpacking the "specified service trades or businesses" definition for purposes of aggregating activities
  • Recent IRS guidance and test standards in determining whether a business line is ineligible to claim the 20% deduction
  • W2 wage and income test for purposes of QBI eligibility
  • Benefits to taxpayers of aggregating multiple trades and businesses

Faculty

Mandarino, Joseph
Joseph C. Mandarino

Partner
Smith Gambrell & Russell

Mr. Mandarino's practice focuses on corporate, tax and finance law. He is involved with a wide variety of...  |  Read More

Additional faculty
to be announced.

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