Section 446 Separate Trade or Business Rules: Identifying Distinct Business Lines
Real Estate Safe Harbors, Intersection Between Sections 446 and 162, Impact of 199A on STB Determination
Recording of a 110-minute CPE webinar with Q&A
This course will provide partnership tax advisers with a thorough and practical guide to the Section 446 separate trade or business (STB) rules. The panel will dig into the standards for determining whether an activity qualifies as a separate trade or business, discuss accounting method considerations for separate business lines, and offer an in-depth exploration of the STB rules underpinning Section 199A.
Outline
- Section 446 general rules and initial guidance
- The intersection of Section 446 with Section 162
- Facts and circumstances analysis
- Tests for determining whether distinct activities are STBs under Section 446
- Impact of Section 199A deduction on separate trade or business analysis
- Clarifications on STBs
- Cross-references to Section 1202 capital gains exclusion rules
- Differences between Section 199A STB definitions and other IRS provisions regarding service businesses
- Notice 2019-07 Safe Harbor for real estate pass-through entities
Benefits
The panel will discuss these and other vital questions:
- How Section 446 rules operate for purposes of adopting or changing accounting methods for separate trades or businesses
- How the Section 199A regulation definitions of STBs differ from other provisions in the Internal Revenue Code regarding service-related businesses
- The safe harbor test for rental real estate businesses held in pass-through entities for STB calculations to qualify for the Section 199A deduction
- How the STB determination works for real estate businesses in general and STB factors unique to rental real estate activities
Faculty
Melissa Abel
Manager
KPMG
Ms. Abel is currently on rotation at Washington National Tax in the Income Tax & Accounting practice. Prior to the... | Read More
Ms. Abel is currently on rotation at Washington National Tax in the Income Tax & Accounting practice. Prior to the rotation, she was a Senior Associate in the Orange County Business Tax Practice specializing in accounting methods and credit services. Ms. Abel joined KPMG as an intern in June 2011 and subsequently started as an associate in August 2012. She has worked primarily on tax consulting and compliance issues related to accounting method changes, income and expense recognition, and book-to-tax differences. Ms. Abel has worked on a range of issues for both public and private companies, including FORTUNE 500 clients.
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Ossie Borosh
Principal
KPMG
Ms. Borosh focuses on partnership taxation and issues relating to investment funds, including private equity funds and... | Read More
Ms. Borosh focuses on partnership taxation and issues relating to investment funds, including private equity funds and real estate funds. Previously, Ms. Borosh served as a Senior Counsel in the Office of Tax Legislative Counsel at the U.S. Department of the Treasury specializing in partnership taxation issues, where she had primary responsibility for development and publication of guidance, in collaboration with the IRS Office of Chief Counsel, relating to partnership tax projects on the IRS Priority Guidance Plan. Ms. Borosh is a frequent participant in panels relating to partnership tax issues and has spoken at many conferences.
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Deanna Harris
Senior Manager
KPMG
Ms. Harris advises KPMG partners, employees, and clients on partnership, S corporation and general corporate tax... | Read More
Ms. Harris advises KPMG partners, employees, and clients on partnership, S corporation and general corporate tax matters. She serves as a cross-functional adviser to firm personnel and clients regarding issues arising in both corporate and partnership transactions. In that capacity, Ms. Harris frequently advises many of the firm’s largest clients in tax planning for partnership transactions including partnership income and liability allocations, section 704(c) planning, debt restructurings, and “disguised sale” transactions. She is responsible for instructing firm-sponsored seminars in the taxation of corporations, taxation of partnerships, the taxation of S corporations, and advanced topics in mergers and acquisitions, and is also a frequent author on those topics. Prior to joining KPMG, Ms. Harris was an attorney with the IRS’ Office of Chief Counsel, Passthroughs and Special Industries Division.
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Colleen O'Connor
Principal
KPMG
Ms. O’Connor advises clients in a variety of industries on matters involving timing provisions governing income... | Read More
Ms. O’Connor advises clients in a variety of industries on matters involving timing provisions governing income and expense recognition, capitalization of tangible and intangible assets, uniform capitalization, transactional accounting methods issues, accounting methods for foreign E&P, long-term contract accounting and IRS procedures regarding changes in accounting methods and periods. She has over 18 years of experience in a national tax practice role with a broad base of knowledge of accounting methods. Ms. O’Connor assists clients with accounting method matters across a number of industries, including primarily financial services, healthcare and manufacturing. She also represents clients before the IRS National Office on matters including private letter ruling requests, requests for technical advice, and changes in accounting methods and periods, as well as before IRS Exam and the Office of Appeals. Ms. O'Connor is a frequent speaker for Tax Executives Institute and is a former Chair of the American Bar Association’s Tax Accounting Committee.
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