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Sec 199A Deduction and its Potential Impacts on Producers and Grain Marketing Firms

Sec 199A Deduction and its Potential Impacts on Producers and Grain Marketing Firms
The newly passed Tax Cuts and Jobs Act of 2017 introduced substantive changes to individual and entity-level tax rates and deductions, many of them welcomed by individuals and corporations. One section of the Internal Revenue Code (IRC) in particular--IRC § 199A Deduction for Qualified Business Income of Pass-Through Entities (Sec 199A hereafter)--is getting a lot of attention, raising questions and eyebrows for its potential impacts on grain marketing decisions. In essence, language in this section of code gives producers marketing grain a significant incentive to sell to a cooperative rather than a non-cooperative firm.  For more, please click here.

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