Section 199A Deduction for Pass-Through Entities

Section 199A permits a deduction of up to 20% of qualified business income (“QBI”) from a domestic pass-through business, plus 20% of qualified REIT dividends and 20% of qualified PTP income,
if applicable, and is available for tax years beginning after December 31, 2017 and before
January 1, 2026. 


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199A | Legislations and Pronouncements

199A | Frequently Asked Questions

Section 199A Frequently Asked Questions

Q: What is the § 199A deduction?

Effective for tax years beginning after December 31, 2017 and before January 1, 2026, a taxpayer other than a corporation is entitled to a deduction equal to 20% of the taxpayer’s “qualified business income” earned in a “qualified trade or business.”

Q: Who can claim the § 199A deduction?

The § 199A deduction is available to any taxpayer “other than a corporation,” this includes Individual owners of sole proprietorships, rental properties, S corporations, or partnerships.

Q: How much is the § 199A deduction?

Subject to certain other limitations, each individual pass-through business owner may be able to claim the § 199A deduction for the lesser of: (i) 20% of the combined qualified business income (QBI) from the individual’s trades or businesses, plus 20% of the individual’s combined qualified REIT dividends and qualified Publicly Traded Partnership (PTP) income; or (ii) 20% of the amount by which the individual’s taxable income exceeds the individual’s net capital gain.

For a complete list of frequently asked questions, visit the resources tab below.

199A | Research and Reports

199A | Cherry Bekaert Resources

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Guidance on the 199A Deduction for Pass-Through Entities

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February 1, 2019
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Guidance on the 199A Deduction for Pass-Through Entities

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February 13, 2019
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