20% pass through deduction for rental income

[Wai Chan]

If me and wife own a piece of rental property (joint tenants and not under any LLC), does it consider as pass through entity? When we file tax jointly next year, can we claim the 20% pass through deduction for the rental income. I am not sure the definition of partnership mentioned as below. Is joint tenants a type of partnership?

This is a snippet of the article I read online:
>>For landlords, the most stunningly good provision of the TCJA is a new tax deduction for owners of pass-through businesses. This includes the vast majority of residential landlords who own their rental property as sole proprietors (who individually own their properties), limited liability companies (LLCs), and partnerships. With these entities, any profit earned from the rental activity is “passed through” to the owner or owners’ individual tax returns and they pay tax on it at their individual income tax rates.

Thanks.

[Michael Plaks]

@Wai Chan

You do qualify as a pass through entity, however it does not mean that you will have any deduction. More likely no than yes. Here is why.

1. The deduction is not 20% of the rent. The deduction is 20% of the net income, after all deductions, including depreciation. For most single-family landlords with mortgages this net income is actually negative, so there is no 20% deduction.

2. The deduction requires that you are a "trade or business." While it is not defined, the common understanding is that having one rental property is not enough to pass this test. We expect some clarifications from the IRS, which may or may not come.