2020 national income tax workbook...what it really means: ... safe harbor simplified method cannot...

2020 NATIONAL INCOME TAX WORKBOOK

CHAPTER 11: BUSINESS TAX ISSUES

1

2

3

4

Power Point Slides – website

https://www.canr.msu.edu/taxschool/2020-two-day-tax-seminar-powerpoint-slides

5

Bonus Depreciation – Final Regulations

Multilevel Marketing

Opportunity Zones

New Health Reimbursement Arrangements

CHAPTER 11 INTRO AND LEARNING OBJECTIVES

p. 361

6

BONUS DEPRECIATIONp. 362

50% 100%

9/27/2017

TCJA 2017

Used Property

New Final Regulations & Proposed regulations –

What property qualifies?

7

QUALIFIED PROPERTYp. 362

Bonus vs Section 179?

Side by side comparison in the Ag Chapter 7

See page 230

8

BONUS DEPRECIATION - ELIGIBLE PROPERTYp. 363

Primary test: Recovery period 20 years or less

Other items qualify that don’t meet the 20

year test:

• Certain computer software

• Water utility property

• Film or television production

• Live theatrical production

9

BONUS DEPRECIATION- INELIGIBLE PROPERTY p. 363

taxpayer elects out of 168 – 168(f) election

• autos using standard mileage rate

must be depreciated under ADS

elect not to deduct bonus depreciation

specified planting - claim in a prior year

claimed a credit instead of bonus (former 168(k))

floor plan financing indebtedness

10

QUALIFIED IMPROVEMENT PROPERTY p. 363

Leasehold improvement

Restaurant property

Retail impr property

GONE!

12/31/17

Qualified Improvement

Property:

Improvements to:

interior of nonresidential

real property previously

placed in service

15 year and bonus

11

QUALIFIED IMPROVEMENT PROPERTY p. 363

12/31/17

Qualified Improvement

Property does not include:

1. Enlargement 2. Elevator

3. Internal structural

framework

15 year and bonus

12

QUALIFIED IMPROVEMENT PROPERTY p. 363 & 364

TCJA did not specify QIP was 15 year property!

CARES Act (3/27/20) retroactively classified QIP

property, acquired in 2018 - 2020, as 15 year

property (and bonus)

Rev Proc 2020-25 provides guidance on amending

returns or filing a 3115.

13

PREVIOUSLY USED PROPERTYp. 364

Not used by taxpayer

Not acquired from a

related party

Acquired

qualifying

used property

Cost basis not

determined by

reference to the basis

of other property held

by the taxpayer

- 179(d)(3) rules

14

“USED BY THE TAXPAYER” p. 364

Taxpayer had a depreciable interest (only

for the previous 5 years), whether or not

depreciation claimed

15

Doesn’t mean

what it says!!

What it really means:

“USED BY THE TAXPAYER” p. 364

Previous depreciable interest

NOT taken into account if:

Taxpayer acquires

property & placed

in service

Taxpayer

disposes

property

< 90 days

Taxpayer reacquires

property & places in

service

Does not apply if taxpayer reacquires property in same tax year

16

17

POLLING QUESTION #1

Qualified Improvement Property has a 15 year recovery period.

TrueFalse

18

POLLING QUESTION #1

Qualified Improvement Property has a 15 year recovery period.

TrueFalse

EXAMPLE 11.1 – ORIGINAL USE AND USED PROPERTYp. 365

Alice bought new machine for 35,000

8/1/18 7/1/20 10/1/20

Joan bought machine from Alice for 20,000

Joan reconditioned the machine for 5,000

Qualifies for

bonus

depreciation.

Original Use

Qualifies for

bonus

depreciation.

Used

property OK

Qualifies for bonus

depreciation.

Original Use

20

EXAMPLE 11.2 PURCHASE OF CO-OWNED INTEREST

p. 365

2018 2020

Mark and Norm

purchase new

equipment

Each 50% interest

Mark

50%Norm

50%

(Not a partnership)

Norm bought Mark’s interest

Does this purchase qualify for

bonus depreciation?

Yes. Norm is not treated as

having used Mark’s

depreciable interest prior to

the acquisition

21

EXAMPLE 11.3 PREVIOUSLY LEASED PROPERTY

p. 365

Equipment

Ken Louie

lease2018

2020

Equipmentsale

Qualifies for

bonus.

No

depreciable

interest

Not related

22

EXAMPLE 11.4 PREVIOUSLY LEASED PROPERTY

p. 365

Equipment

Ken Louie

lease2018

2020

Equipmentsale

Does not

qualifies for

bonus.

Related

parties

related

23

SUBSTANTIALLY RENOVATED PROPERTY p. 366

Rebuilt

Qualify for “original use”?

Yes, if:

Cost of new parts

> 80% of total cost of

the property

If the taxpayer or predecessor

had an interest in the property

before it was substantially

renovated, that interest is not

taken into account

25

BONUS DEPRECIATION AND PARTNERSHIPSp. 366

Issues unique to partnerships:

NOT eligible for bonus:• Property contributed to a partnership• Remedial Special Allocations • Property distributed to a partner• Basis adjustment under 734(b) – certain partnership

distributions

28

1065

EXAMPLE 11.6 PROPERTY CONTRIBUTED TO A PARTNERSHIP

p. 367

Basis determined

by reference to

Peter’s basis.

No bonus

OP

Partnership

Oscar Peter

contributed

propertycontributed

cash

29

743(B) ADJUSTMENTS

p. 367

743(b) adjustments resulting from a purchase

of a partnership interest do qualify for bonus

depr, IF:

• Partner did not have a depreciable interest

in the portion of the property to which the

section 743(b) adjustment is allocated

• Transferor and transferee are unrelated

30

EXAMPLE 11.7 PURCHASE OF PARTNERSHIP INTEREST

p. 367

QRS

Partnership

Reggie

Quentin 100,000

cash100,000

cash

Only Asset – retail motor fuels outlet, cost 300,000.

Elected not to claim bonus. Claimed 15,000 depr

2019

31

Sam

100,000 cash

EXAMPLE 11.7 PURCHASE OF PARTNERSHIP INTEREST

p. 367

QRS

Partnership

Reggie

Quentin

2020

32

Sam

Outlet now worth 600,000

Timothy

Buys interest

for 200,000

743(b) adjustment:

Outside basis 200,000

Inside basis (95,000) 100,000-5,000 depr

Qualifies for bonus 105,000

LIKE KIND EXCHANGESp. 368

Only Real Property eligible for like kind exchange

treatment.

So now trade-ins are fully taxable transactions and

the trade in value is now eligible for bonus

depreciation.

Example 11.9 in book.

33

ELECTING OUTp. 368

34

STATEMENT #1

Taxpayer elects

out of bonus

depreciation on

all assets in the 5

year asset

property class By due date, including extensions

Only revoked

by letter ruling

However, automatic 6 month extension from due date, excluding extensions, where taxpayer may amend return

NOT IN BOOK; REV PROC 2020-50 11/6/20

35

Section 1 – Purpose Apply 1.168(k)-2 : Add’l First Year depr

Section 2 – Background - increased bonus to 100% & used

property, etc…

Section 3 – Scope all depreciable property acquired after

9/27/17

Section 4 – Method change procedures to apply additional

first year depreciation regulations

NOT IN BOOK; REV PROC 2020-50 11/6/20 (56 PAGES!)

36

Section 5 – Automatic extension of time to file certain elections

- for assets placed in service in 2017 – 2020

Section 6 – Consent to revoke certain elections under 168

- for assets placed in service in 2017 – 2020

Section 7 – Changes in method of Accounting

- late elections or revocation of elections

Section 8 – Modifications to Rev Proc 2020-25

37

POLLING QUESTION #2

In a like-kind exchange of a used tractor for a new tractor, the trade-in

value received on the old tractor is eligible for bonus depreciation.

True

False

38

POLLING QUESTION #2

In a like-kind exchange of a used tractor for a new tractor, the trade-in

value received on the old tractor is eligible for bonus depreciation.

True

False

ISSUE #2 – MULTILEVEL MARKETING

p. 369

6,800,000 direct sellers 35.2 billion in sales – growing

Typically through a Schedule C

Product categories:

• Wellness

• Services

• Home/family care

• Personal care

• Clothing / accessories

• Leisure & education

39

ISSUE #2 – MULTILEVEL MARKETING p. 370

The Direct Selling Association and Federal Trade Commission have definitions of the industry

IRS has a definition – called direct sellers• Single level marketing

• Cannot take on other distributors• Reward sellers for their own sales activity

through commissions or bonuses• Multilevel marketing

• Can sponsor other distributors • Receive commissions based on downliners

40

STATUTORY NONEMPLOYEE p. 370 & 371

99.9% of all direct sellers are independent contractors

Individuals who are direct sellers are treated as self

employed persons under IRC 3508, regardless of common

law tests.

Statutory nonemployee under 3508:

• If engaged in certain sales businesses (not retail)

• Remuneration is related to sales (not based on hours)

• There is a written contract – not treated as employee

41

DUAL SERVICES - EXAMPLE 11.10

p. 371 & 372

Brett

homeowner

Sells siding

Installs siding - value exceeds

10% purchase price of siding

commission

commission

Nonemployee for

services as direct

seller

Common law principles

for installation

42

MULTI LEVEL MARKETING INCOME p. 372

43

Income from direct sales of products

• If must purchase inventory

Commissions, bonuses

• If MLM company ships products to consumer

Prizes / awards

Gifts of products to the direct seller

MULTI LEVEL MARKETING INCOME p. 372

44

MLM

Company

MLM Seller

inventory

Customer

MULTI LEVEL MARKETING INCOME p. 372

45

MLM

Company

MLM Seller

Customer

MULTI LEVEL MARKETING INCOME p. 372

46

MLM

Company

MLM Seller

Customer2. Product

Downline

MLM Seller

4. Commission

EXAMPLE 11.11 – INVENTORY SALES p. 372

47

Juice Addition

Angie

1/1/20 no inventory

6,000 vitamins purchased(400) Personal gifts(40) Personal use

5,560(300) 12/31/20 inventory5,260 COGS

7,000 sales1,740 profitCustomers

PRIZES AND AWARDS

p. 373

48

Cash

Free

merchandise

Trips

JewelryMemberships

Tickets

Prizes and

awards

DEDUCTIONS

p. 373

Ordinary and necessary(not a hobby)

49

Start up costs Commissions Gifts

Auto TravelOffice in

home

START-UP COSTS – IRC 195

p. 373

Capitalize start-up

costs:

- Exploring different

businesses

- Training

- Fees

Start business

Elect to deduct start up

costs up to 5,000

(reduced if over 50,000)

Balance amortized over

15 years

50

EXAMPLE 11.13 COMMISSIONS PAID p. 374

Ella & Dash Jewelry

Julie Jones

Directseller

Directseller

10% com

7% com

Julie Jones

March 2020

500 sales

800 sales1,300 sales

Reports

130 (10%)

com

- 56 (7%) com

51

SAMPLES AND PROMOTIONAL ITEMS p. 374

52

Give product samples

taxpayerdownline sellers

customers

Follow gift rules:

25 / individual / year!

EXAMPLE 11.14 HOSTESSp. 374

53

CorinneDirect seller

HostessGift – value depends on sales volume Report FMV

as incomeDeduct cost –separate purchase or part of COGS Not subject

to gift rules

54

POLLING QUESTION #3

How much can a start-up company deduct as start up costs:

5,00010,000

55

POLLING QUESTION #3

How much can a start-up company deduct as start up costs:

5,00010,000

EXAMPLE 11.15 – PRIZE – BUSINESS EXPENSE

p. 374

56

Nancy

Direct seller

Direct seller

Incentives, ie: sporting event tickets

Deductible

FMV-Taxable

Not gifts

GOODS USED FOR DEMONSTRATIONp. 374

57

Products used for demonstration

available for sale used for demonstrations

include in COGS < year > year

deduct capitalize

AUTOMOBILE EXPENSES

p. 375

58

Standard mileage rate

57.5 cents / milefor 2020

Actual method

But, no commuting

TRAVEL EXPENSE

p. 375

59

Code: “Ordinary and necessary”Regs: “Reasonable and necessary”

“Solely for business”Not “lavish or extravagant”

NOTE: Meals limited

Example 11.18 – Convention strictly for business

BUZZ WORDS

BUSINESS USE OF HOME

p. 375

60

Tests of section 280A:

Regular - more than incidental / occasional

Exclusive – identifiable specific area

(reminder – no office in home for employees)

EXAMPLE 11.19 & 11.20 MIXED USE

p. 376

61

Den-MeetingsKids

No – does not meet exclusive use test

Storing inventory

LaundryYes – exempt from exclusive use test

FUNCTION TESTSp. 376

62

Must meet one of the following:• Principal place of business• Meet with patients, clients or customers in the

normal course of business • Separate structure

CALCULATING THE DEDUCTION

p. 376

63

Actual expense method

Safe harbor simplified method

Cannot create at loss

HOBBY OR BUSINESS

p. 376

64

IRC 183 applies

Old law New Law

Income taxable.

Expenses, up to income, deductible as misc itemized deduction, if over 2%

Income taxable. Expenses not deductible, even if profitable.But, COGS deductible

NOTE: Gross income taxable,

not gross receipts

HOBBY LOSSES - 9 FACTORS p. 377

65

Good analysis of 9 factors for Direct

Sellers on pages 377 and 378

1,3 and 6 most relevant:

• Manner carried on

• Time & effort

• History of income/loss

Short break!

67

ISSUE #3 OPPORTUNITY ZONES

p. 380

68

75 Billion in private investment in first 2 yearsEconomically distressed communityList of zones found in Notice 2018-48:

QUALIFIED OPPORTUNITY PROPERTYp. 380

70

Qualified Opportunity Funds

Investment Vehicle

Qualified Opportunity Property>90%

Qualified Opportunity Business property

Qualified Opportunity Zone Partnership interest

Qualified Opportunity Zone Stock

QOF BUSINESS p. 381 & 382

71

Qualified Opportunity Zone Business

Qualified Opportunity Business Property

70% of assets

50% of gross income in QOZ

3 safe harbors for meeting test or facts and circumstances

TAX DEFERRALp. 382

72

Elect to defer capital gain on sale to unrelated party

If, the gain invested in QOF within 180 days of the sale, but some special rules

Only sales before 12/31/2026

EXAMPLE 11.22 INVESTMENT IN OPPORTUNITY ZONE p. 382

73

Initial basis - Cost less deferred gain. May be zero

Sold investment property 1,200,000Basis (700,000)Gain 500,000

Invested the 500,000 into QOF and elected to defer gain

Basis in QOF is zero

If sold for 450,000 in 2021, recognize 450,000 gain(even though 50,000 economic loss)

BASIS ADJUSTMENTS p. 382

74

If investment held at least 5 years, basis increases by 10% of the amount of deferred gains.

If the investment is held at least 7 years, the basis increased by another 5%. (so 15%)

If the investment is held at least 10 years, taxpayer may elect to adjust basis to equal the FMV of the investment on the date the investment sold.

RECOGNITION OF GAIN

p. 383

75

Inclusion events: Sale, gift, charitable contribution, transfer to nongrantor trust, transfer to spouse in divorce, abandonment.

(Does not include transfers by death or transfers to a disregarded entity or grantor trust)

CLIFF: must report gain on 12/31/2026!!

GAIN RECOGNITION p. 383

77

Defer 5 7 >10Gain years years 12/31/2026 years

IncreaseBasis by 10% ofdeferredgain

IncreaseBasis by 15% ofdeferredgain

Recognizeall deferred gainBasis = FMV

Elect to increase basis to FMV when sold

Exclude gain on appreciation after 12/31/26

EXAMPLE 11.23 SALE OF QOF PRIOR TO 2026 p. 383

78

Sold investment property 1,200,000

Basis (700,000)

Gain 500,000

Invested the 500,000 into QOF and elected to

defer gain. Basis in QOF is zero.

If holds for 6 years and sells in 2025 for 900,000, basis

will be increased by 10% or 50,000.

Sales price 900,000

Basis (zero + 50,000) (50,000)

Gain 850,000

EXAMPLE 11.25 QOF HELD THROUGH 2026p. 383

80

1/1/23 12/31/2026 1/1/36

Deferred 500,000

Recognize 500,000 gain. Basis now 500,000

Sold investmentfor 750,000Elect to treat basis as 750,000.

250,000 gain avoids taxation

81

POLLING QUESTION #4

If you hold your investment in a

Qualified Opportunity Zone Fund for 7 years you can increase your basis by

what percentage of the deferred gain?

10%

15%

82

POLLING QUESTION #4

If you hold your investment in a

Qualified Opportunity Zone Fund for 7 years you can increase your basis by

what percentage of the deferred gain?

10%

15%

1231 GAINS – QUALIFY FOR DEFERRAL?

p. 384

83

Refresher:

Offset all 1231 gains and losses to determine if

overall gain or loss. Net 1231 gains capital, losses

ordinary

Certain 1231 gains, recaptured as ordinary

5 year look back - gains cannot exceed losses

So determining 1231capital gains is complex and

can only be determined at year end!!

1231 GAINS – PROPOSED REGULATIONS

p. 384

84

Proposed Regulations:First determine net capital gains for the year. Can

only defer net capital gain.

Proposed Regulations Solution:Since net capital gain income can only be

determined at end of year, a taxpayer can elect

to start 180 day reinvestment period as of the last

day of year.

FINAL REGULATIONS – CHANGES TO 1231 GAINS p. 384

85

Final Regulations:

The capital gains eligible for deferral determined

based solely on sale generating the gain.

So: 1. Losses from other transactions &

2. Unrecaptured losses from previous 5 years

will NOT reduce the gain eligible for deferral.

Investment period now starts as of date of transaction

ELECTION AND REPORTINGp. 384

86

Gain is reported as normal on Form 4797,

Schedule D and Form 8949

Election to defer gain is on it’s own row on

Form 8949.

• Part l for short term

• Part ll for long term

EXAMPLE 11.26p. 385

87

4/22/95 4/1/20

1245 500,000 - (500,000) 0 500,000 500,000

building 3,000,000 - (2,075,000) 925,000 1,675,000 750,000

land 325,000 325,000 325,000

3,825,000 2,500,000

Motel depr basis sale gain

7/1/20

Sold rental home 271,795

Basis 500,000 – 128,205 depr (371,795)

Loss on sale (100,000)

p. 387

88

EXAMPLE 11.26 FORM 4797 PART 111

p. 386

89

EXAMPLE 11.26 FORM 4797 PART 1

1.

2.

p. 388

90

EXAMPLE 11.26 FORM 8949

1.

2.

FORM 8949 - CODE Z

p. 388

91

Instructions:

EXAMPLE 11.26 – FORM 8997p. 389

92

COVID 19 ADMINISTRATIVE RELIEF

p. 391

93

Notice 2020-26

• Extends working capital safe harbor

• Extends reinvestment period

Notice 2020-39

• Extension of 180 day investment period

• Relief from failing to meet to 90% investment

standard

• Relief from Substantial Improvement period

ISSUE 4 – NEW HEALTH REIMBURSEMENT ARRANGEMENTS

p. 392

94

HRA – Health Reimbursement Arrangement

• Employer contributes to employee’s plan

• Excluded from income

• Distributions – reimburse qualified medical

expenses

• Unused amounts can be carried over

ACA requirements for HRAs

• Penalties for failure to comply

• Many employer’s ended plans

QUALIFIED SMALL EMPLOYER HEALTH REIMBURSEMENT ARRANGEMENTS

p. 392

95

QSEHRA

2016

Under 50 employees

No group health

insurance

Employees in minimum

essential coverage

Max 5,250 / 10,600

No PTC, if QSHERA

affordable

EXPANDED HRA OPTIONS

p. 393

96

2017- guidelines to expand HRAs

• Final regs issued 6/20/19

Two new options:

1. Individual coverage HRAs (ICHRAs)

2. Expand excepted benefit HRAs

Help employees purchase healthcare insurance

or pay medical expenses on a tax-advantaged

basis for plan years beginning in 2020

ICHRAS (INDIVIDUAL COVERAGE HRAS)p. 393

97

ICHRA

2020

Funded solely by employer

Employees enroll in individual health ins (or

Medicare A & B)

Reimbursements for premiums

and cost sharing

No Healthcare sharing ministries, short-term, solely dental, vision

Rollover excess

Any amount

EXAMPLE 11.27 p. 394

98

Lionel (married, no children) Lane

Received insurance

from employer

Purchased insurance for

1,200/mo (14,400/year)

2020 – employer offers

plan (not family) up to

12,000 per year.

Lane can exclude the

12,000 from wages

SUBSTANTIATIONp. 394

99

Two substantiation

requirements:

1. Employee must prove

actual enrollment in eligible

coverage

2. Plan may not reimburse

employee unless enrolled in

the month the expense

incurred

employer

Attestation

Form

NONDISCRIMINATION

p. 394

100

Offer it on the same terms to all employees

within a class of employees

Classes Full vs part time Waiting periodGeographical SeasonalCollective bargaining Nonresident aliens Salaried vs hourly Temporary

New employees

IMPACT ON THE PREMIUM TAX CREDIT

p. 394

101

Downside!!

Affordable ICHRA is offered, whether or not the employee takes it

orEmployees chooses an ICHRA, regardless whether it is affordable

=No premium

tax credit!!

UNAFFORDABLE ICHRA

p. 395

102

If the ICHRA is unaffordable, the employee

can opt out of the ICHRA and still be

eligible for the PTC.

So,Calculate which is better

WHAT IS AN AFFORDABLE ICHRA?

p. 395

104

1/12

(monthly)

employee’s

income

Monthly

amount

made

available

under ICHRA

Monthly

premium self

only

silver plan

balance

9.87%

(2020)

less

equals balance

times

equals<

Even if

family

plan

EXAMPLE 11.28 IMPACT ON PTC

p. 395

105

Ron and Paula - joint, 2 kids, income 60,000

Ron: self –employed

Have been purchasing health insurance through

Marketplace and receiving advanced PTC

Paula’s employer offers ICHRA

– 6,000 single / 12,000 joint

p. 395

106

Household income 60,000 = 233%

Poverty level 25,750

EXAMPLE 11.28 IMPACT ON PTC

Monthly cost of second lowest Silver 3,031

Expected to pay per month (387)

Monthly advanced PTC 2,644

Household income 60,000

.0774 applicable figure instructions Form 8962 x.0774

Amount annual expected to contribute 4,644

Expected to pay, per month 387

EXAMPLE 11-28 AFFORDABLE ICHRA

p. 395

107

1/12

(monthly)

employee’s

income

Monthly

amount

made

available

under ICHRA

Monthly

premium self

only

silver plan

balance

9.87%

(2020)less

equals balance

times

489<

636

500

136

5,000

affordable

p. 395

108

EXAMPLE 11.28 IMPACT ON PTC

Since affordable, Paula is ineligible to op out!

Actual cost of SLCSP for family 3,031

Tax free from ICHRA (12,000 / 12) (1,000)

Ron and Paula’s responsibility 2,031

(after tax dollars)

NOTICE TO EMPLOYEES

p. 395 & 396

109

Impact of the ICHRA on their PTC eligibility

90 days prior to the offer

Sample forms at www.dol.gov

110

POLLING QUESTION #5

An employee who is offered an

affordable Individual Coverage

HRA is not eligible for the premium tax credit.

TrueFalse

111

POLLING QUESTION #5

An employee who is offered an

affordable Individual Coverage

HRA is not eligible for the premium tax credit.

TrueFalse

SAFE HARBOR FOR LARGE EMPLOYERS

p. 397

112

Is an offer of an ICHRA considered an offer of

affordable coverage for purposes of ACA?

Several safe harbors

Large employers are required to offer minimum

essential coverage that is affordable. Or, make

an employer shared responsibility payment, if

employee obtains PTC

EXCEPTED BENEFIT HRAS

p. 397

113

Allows employer to reimburse additional medical

care expenses:

• Copays / Deductibles

Even if employee declines enrollment in the

traditional group plan

Can cover: dental/vision, COBRA, short-term

health plans, costs not covered by group plan

EXCEPTED BENEFIT HRAS p. 397

114

Excepted

Benefit

HRA

Limited to 1,800

Rollovers OK

Employer

offers traditional

plan Excepted benefit not part of plan

Cannot reimburse ins premiums

Available on same terms to similar

employees

Cannot have with an ICHRA

HEALTH CARE SHARING MINISTRYp. 397

115

501(c)(3)

Share common set of ethical and religious beliefs

Share medical expenses

Members retain membership after medical

condition

In existence since 12/31/1999 and medical

expenses shared since then

Audited annually

HEALTH CARE SHARING MINISTRYp. 397 & 398

116

Proposed Regs – amounts paid for membership

are payments for medical insurance

Allow HRAs, ICHRA, QSEHRA, excepted benefit

HRA to reimburse payments for membership as a

medical care expense

DIRECT PRIMARY CARE ARRANGEMENTS

p. 398

117

A contract between individual and primary

care physician where the physician agrees to

provide medical care for a fixed annual fee

What?

May be:Payment for medical care

Payment for medical insurance

HEALTH SAVING ACCOUNTS

p. 398

118

Health care sharing ministry is medical

insurance and precludes an individual

from contributing to an HSA

119