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Qualified Business Income Deduction
WHO MAY TAKE THE DEDUCTION?
SPECIFIED AGRICULTURAL AND HORTICULTURAL COOPERATIVES (CONTINUED)
A specified agricultural or horticultural cooperative can pass-through a portion of its
DPAD to an eligible patron. An eligible patron is another specified agricultural or
horticultural cooperative, an individual, or a pass-through entity. A C corporation is not
an eligible patron. IRC § 199A(g)(2)(D).
The eligible patron’s ability to deduct DPAD that is passed-through is limited by the
patron’s taxable income calculated without regard to the passed-through DPAD and
after taking into account any deduction allowed to the patron under IRC § 199A(a) for
the taxable year. IRC §199A(g)(2)(B).
A specified agricultural or horticultural cooperative must reduce its IRC § 1382
deduction by the amount of the DPAD allocated to its patrons.
For more information see the Instructions to Form 8903 or its successor.
May 2019
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