Section 199A IRS Final Regulations: Deductions, Limitations, Complexities and Opportunities for Pass-Through Entities

Determining Qualified Business Income, Loss Carryover, Reformation Considerations and More

Recording of a 90-minute premium CLE/CPE webinar with Q&A

Conducted on Thursday, October 10, 2019

Recorded event now available

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This CLE/CPE webinar will provide tax counsel, accountants, and other advisers with an in-depth understanding of the IRS' final regulations under Section 199A and the mechanics of calculating and claiming the qualified business income deduction. The panel will discuss the strict rules, requirements, and limitations of IRC Section 199A and provide a roadmap through many of the available planning techniques used to maximize tax savings under this provision.

Description

IRC Section 199A, a complex tax law added by the 2017 tax reform law, provides certain taxpayers a deduction of net income attributable to certain qualified businesses. Over the course of 2018, the IRS issued proposed and, eventually, final regulations providing clarity to many issues under the tax provision. This deduction creates a tax benefit to sole proprietors and owners of pass-through entities carrying on qualified businesses by effectively reducing their federal income tax rate. Individuals, trusts and estates are eligible to claim the deduction based on their share of qualified business income, but only subject to the many strict requirements of IRC Section 199A.

The deduction equals up to 20% of a taxpayer's qualified business income from a certain trades or businesses, as well as 20% of qualified REIT dividends, publicly traded partnership income, and qualified cooperative dividends received by a taxpayer. The complexities of claiming the IRC Section 199A deduction require that tax advisers carefully evaluate their clients’ eligibility for the deduction, determine whether action should or can be taken to maximize the amount of the deduction, and implement planning strategies to secure the greatest possible benefit available to each taxpayer.

Listen as our panel analyzes the requirements, limitations, and implications of 199A, and provides tips for developing and implementing effective tax planning strategies to take advantage of the qualified business income deduction.

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Outline

  1. IRS Section 199A final regulations
  2. Requirements of 199A
  3. Defining qualified business income and calculating the deduction
  4. Limitations on certain types of businesses or services
  5. Phase-in of wages and capital limitations
  6. How shareholders and members of pass-through entities claim the 199A deduction
  7. Important tax planning considerations

Benefits

The panel will review these and other key issues:

  • IRS final regulations
  • Benefits and limitations of the provision
  • Understanding the rules and eligibility requirements of claiming the deduction
  • Identifying qualified businesses and related income subject to the deduction
  • Understanding the limitations on the deduction, including the wage limitation and combined property and wage-base limitation
  • Exploring the phase-in of the wage-base and other income or capital limitations
  • Entity reorganization options, and avoidance of pitfalls in considering the same
  • Tax planning tactics and lesser-known factors to consider

Faculty

Phillips, Stephen
Stephen L. (Steve) Phillips
Senior Partner / CFO
Phillips Golden

Mr. Phillips heads the firm's tax practice and has spent his career as a tax, business, and corporate partner in...  |  Read More

Wiesen, Dina
Dina A. Wiesen
Managing Director, National Tax Office, Passthroughs
Deloitte

Ms. Wiesen specializes in partnership taxation, specifically the use of partnerships and limited liability companies in...  |  Read More

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