section 199A deduction

Technical topics regarding tax preparation.
#1
philly  
Posts:
1722
Joined:
14-Sep-2014 4:48am
Location:
New York
S-Corp has one shareholder. Corp. has net income of $ 1,500,000 per year. The entity is a manufacturing company.
Would the 100% shareholder be able to take the section 199A deduction on the 1040 and is the deduction subjection to the W-2 50% or fixed asset limitation ? Is the shareholder wages included in the 50% limitation ?
 

#2
Mustang  
Posts:
38
Joined:
18-Nov-2014 8:52am
Location:
Internet
philly wrote:Would the 100% shareholder be able to take the section 199A deduction on the 1040 . . . ?


Yes, subject to limitations.

philly wrote:and is the deduction subjection to the W-2 50% or fixed asset limitation ?


Sounds like the taxpayer will have an AGI far in excess of the threshold amount unless he has large losses from other sources, so yes, the deduction should be subject to both limitations.

philly wrote:Is the shareholder wages included in the 50% limitation ?


Yes. IRC § 199(b)(4).
 


Return to Taxation



Who is online

Users browsing this forum: Google [Bot], Google Adsense [Bot], rkrcpa, Wiles, WiscoTax and 145 guests