The Section 199A (and 1202) Handbook (2nd Edition updated for the final regulations), provides both an introduction to and thorough examination of the 20% tax deduction for trade or business income.

The Section 199A (and 1202) Handbook (2nd Edition updated for the final regulations), provides both an introduction to and thorough examination of the 20% tax deduction for trade or business income.

This landmark book by Alan GassmanBrandon KetronMartin ShenkmanJonathan Blattmachr and Robert Schenck contains the essentials and much more for understanding and advising on this hair-pullingly complex deduction of “Qualified Business Income,” “flow-through” trade or business income, as well as guidance on flow-through entities such as S corporations, entities taxed as partnerships, and schedule C and E businesses and rental activities.

Importantly, this resource includes coverage of the FINAL regulations under Section 199A issued on January 18th 2019. The 2nd edition contains over 600 pages (in searchable PDF format) of Strategies, Charts and Everything In Between to Advise One’s Clients Under the New Regulations.

Here's what Steve Leimberg said about this important book:

It’s telling that an entire book is necessary to explain a single provision in the tax law but it is. This book addresses the information and techniques needed and covers a number of uncertainties and non-tax law considerations that must be considered in making restructuring decisions. You’ll find numerous progressive examples that illustrate the mechanics and numbers of this new law that will be incredibly helpful in understanding how the law works, and how it can be applied to save taxes and reduce creditor exposure to individuals, businesses, and investment entities. 

Particularly useful to have in one place are the Executive Summary of the structure of Section 199A, the actual text of the statute, redlined for the changes made by technical corrections on March 22, 2018, and the Final Regulations Best of all are the book’s “Strategies,” a long list of how to turn this highly-complex set of rules into significant tax savings for clients and its full chapter on “lesser known rules and traps for the unwary.  Timing is everything and this book covers the just released regulations and still unanswered questions.

The 2nd edition of this important book contains 26 charts and covers a host of new issues that advisors need to know about including the following:


·       Specified Service Trades or Businesses

o   Architects and Engineers

o   Law

o   Health

o   Further Discussion and Examples Used in Final Regulations in the Field of Health

o   Pharmacists.

o   Residential Retirement Home.

o   Surgery Centers.

o   Testing Businesses.

§  Stem Cell and PRP Injection Therapies

§  Veterinarians

§  Physical Therapists

§  Remote Radiologists and Non-Patient Contact Professionals

o   What About Marijuana Growing, Refining and Distribution?

o   Accounting

o   Performing Arts

o   Consulting

o   Athletics

o   Actuarial Science

o   Financial Services

o   Brokerage Services

o   Investing, Trading, or Dealing in Securities, Partnership Interests, or Commodities.

o   Businesses Where the Principal Asset is the Reputation or Skill of One or More of Its Employees or Owners.


·       Managing SSTB and Non-SSTB Income and Multiple Trades or Businesses

o   When An Entity With Primarily SSTB Income Has A Small Amount of Non-SSTB Income

o   The De Minimis Exception Applies When An Entity With Mostly Non-SSTB Income Has Less Than 10% SSTB Revenues (5% If Gross Receipts Exceed $25 million).

o   Aggregation of Separate Trades or Businesses for Purposes of the Wage/Property Limitation Under the Final Regulations.

o   Aggregation Requirements to Apply Wages And/Or Qualified Property As Between Separate Trades and Businesses.

o   50% or More Common Ownership Requirement.

o   Sections 267(b) and 707(b) Attribution Rules Apply.

Section 199A Strategies

·       Independent Contractor Safe Harbor Statute for Reasonable Basis Associated With Long Standing Practice of Significant Segment of Industry

·       The employer must have a “reasonable basis” for treating the worker as an independent contractor.

·       The employer has filed all federal tax returns on a basis consistent with independent contractor classification.

·       Pension Plan Concerns With Respect To Independent Contractors.

·       Beware of the Affiliated Service Group Rules

·       Liability Exposure of an Employee to a Misclassified Worker.

·       Planning Opportunity #1 - Transfer Ownership to Family Members Below Threshold Amounts

·       Planning Opportunity #2 - MSO with Less Than 50% Common Ownership Providing Property or Services to SSTBs

Real Estate

·       Qualifying For Trade or Business Status

·       Four Factors Courts Use to Determine Trade or Business Status

·       Type of Property.

·       Number of Rental Properties.

·       Involvement of Owner or Agent.

·       Type of Rental.

·       Proactive Steps

Using Trusts for Section 199A Planning

·       Summary of Primary Terms and Concepts

·       Complex Trusts

·       Charitable Distributions

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