“Planners have great challenges with respect to planning under Section 199A.  Proper restructuring of existing trades and businesses may save considerable tax dollars, but may be challenged by the IRS, notwithstanding good intentions, logical reporting, and reorganization and changes to entities’ functions with respect to relationships between both related and unrelated parties.

A good many taxpayers will be best served by making affirmative changes that will enhance the chances of qualification for the greatest possible Section 199A deduction, while others may maintain the status quo in the hopes that deductions will be available.  Reorganization will often be appropriate when it achieves both Section 199A benefits and accomplishes other objectives, which may include estate tax planning, liability limitation by segregation of business assets and activities, state income tax planning, and creditor protection planning.  Time will tell which approach works best, but clients should at least be advised of alternatives and strategies.”

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