PWX15: Study Guide for TCJA Pass Through Deductions

Study Guide for Tax Cuts and Jobs Act: Pass-Through Deductions

The study guide is provided to guide you through the course material in a step by step format.

Reading assignments are for “Tax Cuts and Jobs Act:  Pass-Through Deductions.”

1) Business Owners’ Taxable Income Below Threshold

Reading Assignment: Chapter 1 <<>> Review Questions: # 1-3

The learning objectives for this lesson are to gain an understanding of:

  • Recognize a pass-through trade or business;
  • Calculate the pass-through deduction for a qualified trade or business owner whose taxable income does not exceed the applicable threshold;
  • Define the terms “qualified trade or business” and “qualified business income,” for purposes of the pass-through deduction; and
  • Apply the carryover rules applicable to pass-through business owners who have negative combined qualified business income or qualified REIT dividends/PTP income.

2)  When Taxable Income Exceeds the Threshold

Reading Assignment: Chapter 2  <<>> Review Questions: # 1-3

The learning objectives for this lesson are to gain an understanding of:

  • Identify the applicable threshold amounts;
  • Recognize the requirement that would enable an SSTB to qualify for an exception to disqualification for the pass-through deduction;
  • Calculate qualified business income of SSTBs and non-SSTBs for business owners whose taxable income exceeds the applicable threshold;
  • Recognize the methods that may be used to determine W-2 wages for purposes of the pass-through deduction; and
  • Define “qualified property” as used in connection with the pass-through deduction.

3)  When Taxable Income is Within Phase-In Range

Reading Assignment: Chapter 3 <<>> Review Questions: #1-2

The learning objectives for this lesson are to gain an understanding of:

  • Determine when the general rule for calculating QBI is modified for § 199A deduction purposes;
  • Apply the pass-through deduction rules to calculate the reduction percentage and the applicable percentage for purposes of the § 199A deduction;
  • Calculate the § 199A deduction for a pass-through business whose owner’s taxable income is within the phase-in range; and
  • Calculate the § 199A deduction for an SSTB pass-through business whose owner’s taxable income is within the phase-in range.

4)  Specified Services Trades or Businesses (SSTBs)

Reading Assignment: Chapter 4 <<>> Review Questions: #1-3

The learning objectives for this lesson are to gain an understanding of restrictions concerning accepting assistance from:

  • Recognize a qualified trade or business; and
  • Identify specified service trades or businesses (SSTBs).