fbpx
MENU

Section 199A: To Be or Not to Be a Trade or Business

The fickle Section 199 domestic production deduction, which benefitted the real estate construction industry, has left us like a jilted lover.  New to town, however, is Section 199A and she has a very different personality.

Former Section 199 (Domestic Production Deduction.)

Briefly, the former Section 199, which ended December 31, 2017, generally provided a 9% deduction based on the lesser of qualified production activities income or taxable income.1 The deduction was further limited to 50% of wages paid in connection with domestic production gross receipts.2

The former Section 199 was available for all taxpayers, including corporations. Specifically included were estates and trusts, and for owners of pass-through entities (partnerships and S Corporations) and for beneficiaries of estates and trusts (receiving distributions) attribution rules allowed the deduction to be passed out.

To read this article in full, please click here to download a copy in Microsoft Word format.


Footnotes

  1. Section 199(a) of the Internal Revenue Code as effective through December 31, 2017. Under former Section 199(d)(2), for individuals, the term taxable income was substituted for adjusted gross income, determined after application of sections 86, 135, 137, 219, 221, 222 and 469.
  2. Section 199(b).

RECENT ARTICLES

Proposition 19 Brings Substantial Changes to California’s Property Tax Assessment Rules

On November 3, 2020, California voters approved Proposition 19 which brings substantial changes to California’s property tax assessment rules and ...

President Issues Executive Order Deferring Payroll Tax

The White House has been wanting to eliminate the payroll tax for months allowing more money to go into employees ...

UPCOMING EVENTS

January 19, 2021 – Proposition 19: Problems and Property Tax Planning

Cameron L Hess has been invited to present on January 19, 2021, "Proposition 19: Problems and Property Tax Planning," with ...
green and yellow boxes

CHOOSE A LEGAL PARTNER THAT'S COMMITTED TO YOUR SUCCESS.

To find out how we can help you through the complexities of today’s legal issues, call (916) 920-5286 or click below.