Since the passage of the Tax Cuts and Jobs Act, the meetings of the American Bar Association Section of Taxation have produced comments from officials with the Treasury and the IRS that have given hints to the shape of future guidance to be issued on the law. The October meeting in Atlanta has produced new information about the application of the provisions of §199A.
The proposed regulations issued earlier this year provided for a de minimis rule where the performance of what would be in the category of a specified service trade or business would not cause the underlying business to be treated as such if the gross receipts were below specific floors. For a business with gross receipts of $25 million or less, the floor is set at 10% or less of gross receipts. For businesses with gross receipts above $25 million, the floor drops to 5% or less of gross receipts.
Image copyright Ionut Catalin Parvu/123rf.comRead More