MoldMaking Technology

NOV 2018

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36 MoldMaking Technology —— NOVEMBER 2018 THE BOTTOM CONTRIBUTOR Michael J. Devereux II, CPA, CMP is a partner and director of Manufacturing, Distribution and Plastics Industry Services at Mueller Prost. percent of its gross receipts are attributable to the performance of services in an SSTB. That is, mold shops are unlikely to be penalized when providing de minimis consulting services. Multiple Businesses For shop owners who own multiple trades or businesses, each trade or business will compute its quali•ied business income along with its wage and property limitation. While shops are permitted to aggregate these amounts, they are not required to do so. In the event of a shop wanting to aggregate its trades or businesses, special rules and limitations apply. However, quali- fying businesses may not aggregate with SSTBs. Also, shop owners who own their facilities in a separate entity and then rent the plant to the operating business will be happy to learn that the rental income will qualify for the deduction, as long as the rent is coming from a trade or business that meets the requirements for qualifying business income, and there is common owner- ship. However, not all rental income may qualify. Eligibility is determined based on the facts and circumstances. Non-Calendar Year-End S Corporations and Partnerships The proposed rules clarify that indi- viduals or trusts receiving a K-€ from a non-calendar year-end S corporation or partnership for a tax-year straddling December „€, …†€‡ can claim the full §€ˆˆA for the tax year, assuming that they meet all the other requirements. While §€ˆˆA is effective for tax years beginning after December „€, …†€‡, the tax year is determined at the individual or trust level. For example, if an individual owns €†† percent of an S corporation with a •iscal year beginning on August €, …†€‡ and ending on July „€, …†€Š, he or she will be able to claim a §€ˆˆA deduction for the €… months of qualifying business income on his or her …†€Š federal income tax return. The §€ˆˆA flow-through deduction greatly bene•its U.S. mold shops, making it important for them to understand the new rules, the limitations and exclusions so that mold shops do not diminish the bene•its. FOR MORE INFORMATION Mueller Prost 314-862-2070

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