How doI set flywheel to magneto clearance on a Tecumseh H50 engine?

The timing setting is .050 BTDC, before top dead center.

Now for the complicated part:

With the flywheel removed,

Set the point gap.

Use a dial indicator, Techumseh part number 670241 with the correct tip on the extender leg, the small one for your engine, loosen the sleeve that screws into the spark plug hole and insert the end of the dial indicator into the spark plug hole, and rotate the sleeve until seated, seat the dial indicator with the extender leg extended over the piston (the book does not tell how to remove carbon, and I don't use this method), tighten the set screw.

I remove the head, scrape the carbon and gaskets from the top of the block and piston, and using a straight edge across the cylinder I insert a .050 feeler guage.

Rotate the crankshaft counterclockwise, when facing the flywheel side, past your .050, and rotate it clockwise until reaching .050, this is to take up slack in the internal parts.

Disconnect the leads from the points terminal. Reinstall and tighten the nut on the terminal. Connect an Ohm meter to the terminal and ground. With the bolts loose, that hold the stator to the block but tight enough that you can just move the stator, rotate the stator until there is a break in the circuit. Tighten the stator.

Replace everything.

I used to be a small engine mechanic.

Have fun. :-)

How did you know the distance from the top of the cylinder to the piston was .050? Are you saying that if you set the points the gap to the fly wheel will automatically be correct?