section 199A dividends

Forum|Forum|6 years ago
February 25, 2020
2 replies
7 views

How does a section A 199 dividends (very small amount) on a 1099div. impact your tax returns? I realize Intuit tax software will take care the calculation if necessary, but for an education purpose , could someone give an explanation about what is the section A 199 dividends and how it effects your returns, please? Thanks.

Best answer by DawnC

The amount in box 5 of 1099-DIV is considered Qualified Business Income (QBI) which is eligible for a 20% tax deduction. The deduction is also called the Section 199A deduction.

This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.

REIT / PTP Component. This component of the deduction equals 20 percent of the combined qualified REIT dividends (including REIT dividends earned through a regulated investment company (RIC)) and qualified PTP income. This component is not limited by W-2 wages or the UBIA of qualified property. Depending on the taxpayer's income, the amount of PTP income that qualifies may be limited depending on the type of business engaged in by the PTP.

The deduction is limited to the lesser of the QBI component plus the REIT/PTP component or 20 percent of the taxpayer's taxable income minus the net capital gain.

You will see the deduction on Line 13 of your Form 1040 (tax year 2024).

DawnCAnswer

Level 15

The amount in box 5 of 1099-DIV is considered Qualified Business Income (QBI) which is eligible for a 20% tax deduction. The deduction is also called the Section 199A deduction.

REIT / PTP Component. This component of the deduction equals 20 percent of the combined qualified REIT dividends (including REIT dividends earned through a regulated investment company (RIC)) and qualified PTP income. This component is not limited by W-2 wages or the UBIA of qualified property. Depending on the taxpayer's income, the amount of PTP income that qualifies may be limited depending on the type of business engaged in by the PTP.

The deduction is limited to the lesser of the QBI component plus the REIT/PTP component or 20 percent of the taxpayer's taxable income minus the net capital gain.

You will see the deduction on Line 13 of your Form 1040 (tax year 2024).

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rcollier99

Level 2

My 199A dividends are for a trust. I'm using TurboTax Business and the amounts do not populate the 1041 Form and subsequently not the K-1.

bobdrad

Level 3

I have the same situation and am not sure what to do

stanleyjoel

Level 2

Where to enter 199A dividends?? Stanley Madris

AamilD

Level 9

When you are on the input page, click on the option which states "My form has info in other boxes".

This will then show a drop down where you will see less common items. Within that, Box 5 is where you will enter Section 199A Dividends. Please see the image below for further reference.