Trade or Business Definition
The Regs admit there’s no definition of a trade or business (being referred to on the interwebs as ToB) but say look for the definition of ToB in Sec 162.  Turn to Sec 162 and it contains the “necessary and ordinary” clause to qualify for a business deduction but no definition for “trade or business”.  Wait a minute here….yes, yes the IRS is f*cking with you.

Defining Specified Trade or Business (SSTB)
Everyone thought that “any trade or business where the principal asset of such trade or business is the reputation or skill of 1 or more of its employees or owners” was really going to catch a lot of fish until the IRS very narrowly defined it as

(1) receiving income for endorsing products or services, including an individual’s distributive share of income or distributions from an relevant passthrough entity (RPE) for which the individual provides endorsement services; (2) licensing or receiving income for the use of an individual’s image, likeness, name, signature, voice, trademark, or any other symbols associated with the individual’s identity, including an individual’s distributive share of income or distributions from an RPE to which an individual contributes the rights to use the individual’s image; or (3) receiving appearance fees or income (including fees or income to reality performers performing as themselves on television, social media, or other forums, radio, television, and other media hosts, and video game players).

OMG, the IRS just threw down with video game players.  Wait, wait, wait, no one post the Regs to 4Chan.  Instead of Gamergate, this will be RegsGate, and probably no one will ever care about RegsGate unless the IRS website was Rickrolled (4Chan reference)

Then the IRS also examines each industry and tries to draw a line between what is actual practice in this field and what is an ancillary service.  Practicing in the field, example: Doctor will be a SSTB but not the person making medical devices (ancillary service). 

Industries in the SSTB category
1. Health
2. Law
3. Accounting
4. Actuarial Science
5. Performing Arts
6. Consulting
7. Athletics
8. Financial services
9. Brokerage services
10. Investing/Investment Management/Trading/Dealing
Remember: in the 11th hour they purposely excluded architects and engineers, so those two are not SSTB. 

Note: Playing video games on Twitch is a SSTB but not computer coders as far as I can tell. 

You Can Aggregate Shit

You can aggregate your trades or businesses for purposes of the qualified business income (QBI), Wages, and Unadjusted Basis in Property (UBIA).  But no SSTB can be included in the aggregation. 

And although this aggregating has nothing to do with grouping under 469, I imagine you can’t group passive and non-passive activities, because the ToB kind of need to have similar

-          Ownership

-          Share facilities and personnel

-          The ToBs operate in coordination with one another (example: different parts of the supply chain)

But like grouping, once you aggregate, you aggregate for LYFE.  Kind of, this seems a little loosey goosey. It’s not the harsh language in grouping which says if you want to change you need the “consent of the commissioner” as though you’re going to walk pass Mnuchin’s Instagram posting, LV wearing wife, and ask him to sign something. 

The Unadjusted Basis in Property (UBIA) is Going to be Lit

You can’t put stuff into your business and then take it out immediately.  If you acquire property within 60 days of the end of the taxable year and dispose of it within 120 days without having it used in your business for at least 45 days, then it won’t count. 

So take this purely hypothetical example, say you had made a giant blimp of a Donald Trump as a baby to fly over London during a specified time, but then turned around and sold it on eBay within 45 days, then that wouldn’t count as part of your UBIA.

For Like Kind exchanges you’re just going to hate yourself.  You’ll bifurcate the asset (like you already have to do) into the exchanged basis and the excess basis and have two different ending dates for the depreciable period.  This is like already having a thorn in your side but then you find out the thorn has red ants. 

For UBIA for adjustments under sections 734(b) and 743(b), I just can’t.  I just can’t. 


EBSTs are entitled to the deduction under 199A, Hallelujah! Cue Leonard Cohen song.

But don’t create multiple trusts just to take advantage of 199A, cuz the IRS don’t like that and they like everyone (sung to the tune of Bieber’s Love Yourself).