Question: Isaac is an independent insurance agent who sells various insurance products to his clients. He doesn’t provide consulting services. His taxable income for 2019 is $450,000. Does he qualify for the qualified business income deduction (QBID)?
Answer: Yes, Isaac qualifies for QBID. An insurance agent is specifically excluded from the definition of a specialized service trade or business (SSTB) and is not subject to the phase out [§1.199A-5(b)(2)(x)]. The IRS noted that, while the term “broker” is sometimes used in a broad sense to include anyone who facilitates the purchase and sale of goods for a fee or commission, the term “brokerage services” is most commonly associated with services, such as those provided by brokerage firms, involving the facilitation of purchases and sales of stock and other securities [TD 9847, 2/8/2019].
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