As of today, March 23rd, 2018, the revision of Sec. 199A has been signed. The omnibus government-funding bill recently proposed in the House of Representatives contains amendments to Section 199A. Specifically, the proposed legislation amends the definition of “qualified business income (QBI)” by striking the exclusion for “qualified cooperative dividends.” This amendment replaces the current law QBI deduction with a deduction for qualified production activities income. That is similar to the pre-2018 DPAD. The effect of the amendment is to change the farmer’s deduction to equal 20% of taxable income or qualified business income (including cooperative dividends in the computation). Limitations remain in place for farmers with high Read More...
Sec. 199A “Grain Glitch” Fix Proposed
Sec. 199A "Grain Glitch" Fix Proposed In January, we announced a change in the Tax Reform Bill that had a very large impact on the agriculture industry, with the heaviest of the impact placed on cooperatives and private grain firms. This change was Sec. 199A. A few weeks after sharing that article, while anxiously anticipating change (but preparing nonetheless) we published a "next steps" article. It was finally announced on Tuesday this week that House and Senate lawmakers have come to an agreement that a portion of Sec. 199A must undergo a revision. The original version of Sec. 199A (the portion about the deduction based on the sale to cooperatives) was added very last-minute and lawmakers have addressed that it was an admitted Read More...
