Get your taxes done using TurboTax
The review of the boxes and what they represent are discussed below. Once you finish all farm entry you click Continue at the bottom and the qualified business income deductions (QBID) will be asked and TurboTax will do the rest (see the image below). There is some repetition but I though having them all in one place might be easier.
Box 3: A per-unit retain allocation is an amount paid to patrons for products sold for them that is fixed without regard to the net earnings of the cooperative. These allocations can be paid in money, other property, or qualified certificates. This would be income to you.
Box 5: When nonqualified notices are redeemed in cash or other property, the cooperative deducts the payments to patrons from its income, and a patron who receives a redemption includes the amount of the payment received in taxable income.
IRC Section 199A is for the new qualified business income deduction (QBID) which is derived from business or farm income. The following boxes on your Form 1099-PATR pertain to that deduction.
Box 6 is a deduction, if allowed: The deduction allocated to each patron cannot exceed 9% of the qualified payments reported in box 7. Only eligible taxpayers, which does not include a C corporation that is not itself a specified agricultural or horticultural cooperative, may claim a section 199A(g) deduction that is passed through. Do not reduce the amounts reported in box 1 or box 3 by the amount reported in box 6.
- This is similar to the deduction under former section 199, which was known as the domestic production activities deduction. Section 199A(g) allows a deduction for income attributable to domestic production activities.
Box 7 is For specified agricultural and horticultural cooperatives only, enter the qualified payments paid to the patron. You are required to provide this information whether or not you pass any of the section 199A(g) deduction through to the patrons. This is the payment made to your from the profit. Information but not reported as income from this box.
Box 8 is for qualified items of income, gain, deduction, or loss from qualified trades or businesses that are not a specified service trade or business (SSTB) for purposes of section 199A. (Net profit from the business or farm activity - information and not income to you.)
Box 9. Shows amounts received and reported in boxes 1, 2, 3, and 5 from an SSTB that may qualify as qualified items for purposes of the section 199A(a) deduction. Use Form 8995 or 8995-A to determine your section 199A(a) deduction.
Box 13. If this box is checked, the information reported to you is from a specified agricultural or horticultural cooperative, as defined in section 199A(g)(4)(A).
- Where do I enter Form 1099-PATR? (Read carefully to report on your Schedule F)
@mack76a
