2019 January/February EA Journal Exam

3.86 (21 votes)

IRS Program Number: X9QQU-U-00543-18-S 

2018 TCJA Update – The New Rules
By Ben A. Tallman, EA, USTCP
This article provides an overview of the latest tax changes and updates for the 2018 tax year. With the old rules from 2017 now behind us, the author evaluates the new rules and prepares tax professionals for how they will affect clients.

What Are They Doing with Tax Forms?  
By Beth Logan, EA
The Tax Cuts and Jobs Act (TCJA) introduced new tax forms and schedules promising to simplify filing tax returns. This article reviews the new postcard-sized Form 1040 and other forms and discusses why these changes may not be as simple as they seem.

The QBI Effect - §199A 
By Ben A. Tallman, EA, USTCP
One of the more complex provisions of the Tax Cuts and Jobs Act is new §199A, the deduction for qualified business income (QBI). §199A allows a deduction for up to 20 percent of QBI from partnerships, limited liability companies (LLCs), S corporations, trusts, estates, and sole proprietorships. The author discusses what it is, who benefits from this new deduction, and recommendations for clients. 

Employees and the Self-employed: A Comparison under the Tax Cuts and Jobs Act  
By Gil Charney, CPA, CFP, CMA, CGMA, MBA
The 2017 Tax Cuts and Jobs Act (TCJA) is favorable to businesses of all types – corporations, partnerships, and sole proprietorships. For taxpayers in all other business entities – partnerships, S corporations, and sole proprietorships – a new below-the-line deduction was authorized by §11011 of the TCJA, creating §199A of the Internal Revenue Code (IRC). This article examines how this new deduction has stimulated business owners to think about their choice of entity and evaluate – hopefully with professional assistance – whether a change of entity type makes sense for them.

Post-TCJA Qualified Personal Residence Trust Planning 
By Martin Shenkman, JD, CPA/PFS, AEP
The sweeping changes of the Tax Cuts and Jobs Act (TCJA) have prompted reconsideration of many financial plans. The realm of estate planning will be especially affected by the TCJA’s doubling of the federal estate tax exemption. The author presents a hypothetical arrangement involving qualified personal residence trust and discusses practical steps tax professionals might want to recommend, as well as unexpected consequences those steps might create.

Home Mortgage Interest and TCJA
By C. Dale Boushley, EA, CFP
Deducting home mortgage interest under the Tax Cuts and Jobs Act will present major challenges. This articles discusses the three major changes TCJA introduced and the looming problem tax professionals face of not separating acquisition debt and home equity debt loans into their respective components for their clients.

Tax Court: For Purposes of the Passive Activity Rules under IRC §469, How Can a Real Estate Professional Credibly Establish Hours of Participation So As to Avoid Limitations on the Amount of Losses Claimed?
Roberta Birdsong and William H. Birdsong, Petitioners v. Commissioner of Internal Revenue, Respondent
T.C. Memo 2018-148
Filed September 10, 2018
By Steven R. Diamond, CPA 
A passive activity is one that involves the conduct of any trade or business in which the taxpayer does not materially participate. Any rental activity is considered a passive activity whether or not the taxpayer materially participates, however there are special rules for real estate professionals. How can a real estate professional credibly establish hours of participation so as to avoid limitations on the amount of losses claimed?