Whether a Taxpayer Qualifies for 199A Depends on Who You Ask

April 19, 2019

Disagreements over business owners’ use of the new passthrough deduction and the application of the aggregation rules have made for a confusing, and sometimes contentious, tax filing season.

Some of the frustration stems from the fact that whether a business is a specified service trade or business (SSTB) that’s barred from using the deduction depends in large part on the adviser who’s hired. Uncertainty over what can qualify as an SSTB comes up frequently in the healthcare services realm, according to practitioners.

“I’ve had a number of calls from folks who are still asking the question of, ‘Is this an SSTB or not?’” Louis Vlahos of Farrell Fritz PC told Tax Notes. “It’s amazing, they’ve got people taking different positions as to the same business because one wants to play it more conservative than another. It’s really strange,” he said.

Reprinted with permission from Tax Notes, April 15, 2019, pp. 441-443

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