Reg 1 Module 4 Flashcards
Items from Other Entities
How are guaranteed payments shown on partnership 1065 and schedule K-1?
Guaranteed payments are shown has deductible on form 1065 to arrive at ordinary income.
On Schedule K-1, guaranteed payments are shown as income and flow through as ordinary income.
A guaranteed payments by a partnership to a partner for services rendered may include an agreement to pay:
A guaranteed payment is a salary or other payment to a partner that is not calculated with respect to partnership income.
S-Corp, are distributions taxable?
No, distributions are not taxable to the extent that they do not exceed S/H basis.
Income is passed through to shareholders and included in taxable income whether or not it is actually distributed for which form of entity
S- Corp.
Basic Calculation for QBID
20% x QBI
If taxable income is above the taxable income limitations, is a specified trade or business (SSTB), QDIB allowed?
No
What is the overall limitation for QBID?
Once QBID is calculated, the overall deduction is LIMITED to the LESSER of combined QBI or 20% of the taxpayer’s taxable income in excess of net capital gain.
You do not have to use the lesser of 20% X QBI or 50% X wages when a single person’s threshold is less than_____
157,500.
You just use the Basic calc.
20% x QBID.
A specified service trade or business with taxable income over the upper threshold _______ is no eligible for the QBI deduction.
207,500.
50,000 more than where the threshold begins.
The equation for for QBID when Phase out begins for Qualified trade or business.
Step 1: QBI x 20%
W-2 x 50%
Difference is phase out.
Step 2: Find the % of phase
out that applied
which is (amount
over phase out /
50,000)
Step 3: % x phase out =
Applicable phase out
Step 4: QBI x 20%
applicable phase out
= QBID
