Sec. 199A Cutting Edge Tax Strategies for Rental Real Estate

Author: Greg White

We’ll take a comprehensive, deep dive into which rentals qualify (and which might not qualify) for the 20% §199A QBID. We’ll also cover how to compute the “property” factor that can limit the QBID for higher income taxpayers.

Publication Date: September 2019

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

• QBID Overview
• Passive Owners
• Do RE Rentals Qualify for QBID?
• Rev. Rul. 60‐206
• IRS Seems Unsure
• Triple Nets
• Clearing the Fog
• QBID Cap
• Property Factor
• Goldilocks and "Just the Right Amount" of Property
• All Roads Lead to Rome
• Make Life Easier
• Notice 2019‐7: Rental Real Estate "Safe Harbor"
• Rentals and 1099s
• Ambiguity
• Self Rentals → SSTBs
• Basis, At‐Risk, and Passive Carryovers
• Wrapping it Up

Learning Objectives

• Identify case law and administrative law support for taking the QBID on triple net leases
• Recognize and apply the requirements of the IRS's "safe harbor" for rental property
• Describe how to complete the IRS form that reduces the risk of preparer penalties
• Identify special risk issues for taxpayers who reside in the Second Circuit (Connecticut, Vermont and New York)
• Recognize the two requirements Section 162 defines "trade or business expenses"
• Identify court cases and how they apply to your client scenarios
• Describe which type of lease is defined in the Notice
• Recognize which IRS form you can file if the risk of preparer penalties can be reduced
• Identify which type of service qualifies as rental services for purposes of using the rental real estate safe harbor outlined in Notice 2019-7
• Describe which section the tax regulations often use the business definition outlined
• Identify when the depreciation period commences

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None