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Is a farm considered a specified service trade business?

Specified Service Trade Business Farm Business
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John Dundon, II EA
A farmer can have a qualified trade or business that generates a QBI deduction and could be passed through a Section 199A(g) deduction from the Specified Cooperative of which the farmer is a patron. Regardless of whether the section 199A(g) deduction was passed through, the farmer would have to determine whether their QBI deduction is subject to the patron reduction under section 199A(b)(7). The farmer may take any Section 199A(g) deduction passed through to the extent of their taxable income determined after their QBI deduction.
Leave a Comment 10 weeks ago

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John Dundon, II EA
They are agricultural or horticultural cooperatives to which Part I of subchapter T of the Internal Revenue Code applies that are engaged (i) in the manufacturing, production, growth, or extraction (MPGE) in whole or significant part of any agricultural or horticultural product, or (ii) in the marketing of any agricultural or horticultural product that their patrons have MPGE in whole or significant part. Specified Cooperatives include cooperatives that are considered nonexempt or exempt. Exempt cooperatives are those farmers' cooperatives that are qualified under section 521 of the code. An organization will not be considered exempt, even though it operates within the provisions of sections 521 and 1381 through 1388, unless it files IRS Form 1028, Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code or has previously received a ruling recognizing its exemption under section 521 of the Internal Revenue Code of 1986 or corresponding provisions of prior law.
Reply 10 weeks ago


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