Self-Employment Tax and NIIT for LLCs and Higher Income Individuals After Tax Reform
Minimizing Tax Through Activity Groupings, Self-Charged Interest, Blocker Corporations
Recording of a 110-minute CPE webinar with Q&A
This course will provide tax advisers and compliance professionals with a practical guide to navigating the net investment income tax (NIIT) rules as they apply to self-employed taxpayers, and offer tax reduction strategies for minimizing the NIIT. The panel will discuss the impact of the 2018 tax reform law on NIIT calculations and planning opportunities.
Outline
- Introduction
- Pre and post 2013 supplemental taxes
- FICA and SET basics
- NIIT basics
- Self-employment tax implications for LLC members
- The limited partner exception
- Case law and rulings
- Treatment of limited partners under 3.8% taxes, including NIIT
- Rental real estate activities—real estate professionals
- The “limited partner” problem
- Trusts and estates
- Planning opportunities
- S corporations
- Use of LLC and LPs
- Effect of grouping activities
- Self-charged interest and rent
- Avoiding NIIT through “material participation” and “significant participation”
- Net gain from dispositions
- Other business entity strategies
Benefits
The panel will review these and other important issues:
- Interpreting the gaps in IRS regs using recent case law to confirm whether self-employment tax applies to limited partners
- Application of the NIIT to real estate activities and to LLC members generally
- NIIT tax mitigation strategies for trusts and estates
- Evaluation of S corporation “blocker” strategies
- Grouping activities among entities and partners to meet the material participation test
- The treatment of self-charged interest and self-charged rent under the NIIT rule
- Application of NIIT to net gain from dispositions of properties and LLC interests
- Prospects for future legislative or regulatory changes
Faculty
James R. Browne
Partner
Barnes & Thornburg
Mr. Browne advises clients on the U.S. income tax aspects of domestic and international business transactions and... | Read More
Mr. Browne advises clients on the U.S. income tax aspects of domestic and international business transactions and matters involving federal, state and foreign taxes. With more than 35 years of experience, he handles complicated tax and financing issues for a diverse range of clients. He has experience advising sellers and purchasers on tax aspects of business acquisitions involving both strategic and financial purchasers, preparing tax disclosures for debt and equity offering documents, advising clients on tax aspects of forming, funding, and reorganizing corporate and partnership entities, and advising clients on tax and financing aspects of international operations.
Close
Cameron L. Hess
Partner
Wagner Kirkman Blaine Klomparens & Youmans
Mr. Hess practices in the firm’s Transaction Department in the areas of taxation and business law. A CPA,... | Read More
Mr. Hess practices in the firm’s Transaction Department in the areas of taxation and business law. A CPA, formerly practicing with KPMG, his practice includes entity formation (LLCs, family limited partnerships, non-profit organizations), and state and local tax controversies (sales tax, franchise tax and property tax). Mr. Hess has over 25 years’ experience in representing a diversity of industries and closely held businesses.
Close