Understanding Section 199A: The 20% Deduction for Pass-Through Entity Owners and Investors in Real Estate

Understand how the 20% deduction for pass-through entity owners works, and how to calculate, apply, and claim the deduction. Use examples to illustrate how the deduction works.
Highlights

• Operational rules for calculating the Section 199A deduction
• Definitions that apply for purposes of the Section 199A deduction
• Calculating the deduction for taxpayers with taxable income within the phase-in-range
• What is a specified service trade or business?
• Computation rules and examples for individuals whose taxable income does not exceed the threshold amount
• Computation rules and examples for individuals whose taxable income exceeds the threshold amount      
• Treatment of non-calendar year taxpayers
• Requirements for aggregation of separate trades or businesses
• Anti-abuse rules targeting use of trusts
• Guidance on methods for calculating W-2 wages for purposes of Section 199A
• Special rules for pass-through entities, SE tax, and net investment income tax