Self-Study: Navigating PTET, NIIT, and SECA for Pass-Through Entities

Overview

Understanding Pass-Through Entity Tax (PTET), Net Investment Income Tax (NIIT), and Self-Employment Contributions Act (SECA) tax is important for identifying strategies to minimize tax liabilities for owners and partners of pass-through entities. David Kirk, Tax Partner and leader of the Private Tax Group of Ernst & Young LLP’s National Tax Department, joins this segment to discuss key tax issues for PTEs and explains the differences between credit and corporate taxation models for PTET, state-specific rules, and the impact of default elections. This includes discussion of how pro rata allocation affects deductions and credits, potential S Corporation status issues, and the role of grantor trusts.

Highlights

• federal tax updates
• IRS compliance guidelines
• automation for accountants
• PCAOB standards

Objectives

• Identify the differences between credit and corporate taxation models for PTET
• Determine how pro rata allocation impacts deductions and credits for PTEs
• Distinguish the self — employment tax treatment for general and limited partners
• Identify strategies to minimize tax liabilities related to NIIT and business — related investment income