Can You and Should You Aggregate for Sections 465, 469, and 199A

Author: James R. Hamill

Taxpayer losses may be limited due to a failure to establish at-risk basis. The at-risk rules require that basis be determined activity-by-activity. Pass through entity tax reporting requires identification of the number of activities. The guidance for aggregation is scant and relies largely on legislative purpose. This course will help preparers decide how many activities exist.

Passive losses are limited activity-by-activity. The regulations provide a facts-and-circumstances guidance on grouping activities. Specific reporting of grouped activities is also required. This course will discuss how to support an activity grouping that best fits the needs of each client. Net investment income groupings follow passive groupings. A special one-time opportunity to change groupings is available for the first year the taxpayer is subject to NIIT.

Finally, Section 199A allows a 20% deduction for qualified business income, determined and reported business-by-business. Generally each business is kept separate. The regulations allow elective aggregation of businesses provided specific provisions are satisfied. This course will discuss the how and why of business aggregation.

In this two-hour course, nationally recognized tax expert and instructor James Hamill, CPA, Ph.D., will explain the rules used to determine aggregation of activities for at-risk, grouping for passive loss and net investment income, and elective aggregation for qualified business income.

Publication Date: January 2023

Designed For
Why Aggregate for Section 199A

Topics Covered

• Entity Determinations of Aggregation and Groupings
• At-Risk Aggregation and Consequences
• Passive Activity Groupings and Consequences
• Net Investment Income Groupings and Consequences
• Elective Aggregation of Business for Section 199A

Learning Objectives

• Recognize Flow Through reporting of at-risk aggregation
• Recognize Flow Through reporting of passive activity grouping
• Recognize Flow Through reporting of business aggregation
• Identify statutory and other guidance for at-risk aggregation
• Identify regulatory guidance for passive activity grouping
• Identify regulatory guidance for business aggregation for Section 199A
• Identify key incentives for aggregation and grouping
• Describe reporting requirements and consequences of failure to report

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None