Calculating New IRC 199A Qualified Pass-Through Business Income Deduction

Determining QBI, Eligible Entities, Phase-Ins, Carry-Forwards, Wage and Capital Limitations

An encore presentation featuring live Q&A

A 110-minute CPE webinar with interactive Q&A


Monday, July 16, 2018

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926

This webinar will guide partnership tax advisers and compliance professionals in calculating the Section 199A Deduction of Qualified Business Income of Pass-Through Entities, which is central to the new tax overhaul/reform legislation. The panel will detail activities eligible for the deduction, describe those excluded from the deduction, offer practical approaches for calculating the deduction, and outline planning tools for pass-through entities to restructure business activities to qualify.

Description

The deduction for qualified business income of pass-through entities (PTEs) enacted under Section 199A is among tax reform’s most complex components. For tax advisers serving partnerships, trusts and other PTEs, tax reform creates significant opportunities and challenges.

The law provides for a deduction equal to 20% of the taxpayer’s qualified business income from pass-through entities, 20% of qualified REIT dividends, qualified publicly traded partnership income, and qualified cooperative dividends. However, Section 199A contains significant limitations on pass-through income that is deductible. For example, most professional service partnerships such as attorneys and accountants are not entitled to claim the deduction for their partnership service income.

Calculating the Section 199A deduction sets up major challenges for tax preparers and advisers. The deduction is subject to wage and capital limitations, with a phase-in of those limits. Advisers must navigate the rules governing carry-forward losses against the allowable QBI deduction. Understanding the mechanics involved in calculating the Section 199A deduction is critical to avoid adverse tax consequences due to missed deduction opportunities.

Listen as our experienced panel provides a thorough and practical guide to calculating the Section 199A Deduction of Qualified Business Income Deduction of Pass-Through Entities in the new tax law.

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Outline

  1. Section 199A deduction defined
  2. Qualified business income
  3. Eligible partnerships and exclusions
  4. Wages and capital limitations
  5. Treatment of carry-forward losses
  6. Calculating the deduction

Benefits

The panel will discuss these and other important questions:

  • Identifying pass-through activities and revenues that are not “qualified business income” eligible for the Section 199A deduction
  • How wage and capital limitations impact Section 199A deduction calculations
  • Handling loss carry-forwards in calculating current and future year deduction
  • Incorporating Section 199A deduction calculations into tax projections to determine if a business should restructure for tax purposes
  • Calculating the 20% QBI deduction for separate lines of business

This is an encore presentation with live Q&A.

Faculty

Bilsky, Jeffrey
Jeffrey N. Bilsky

Partner, National Tax Office
BDO USA

Mr. Bilsky has more than 20 years’ experience providing tax services to private equity investment funds, capital...  |  Read More

Hodges, Will
Will Hodges
Senior Manager
BDO USA

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