Search Knowledge Base by Keyword
Taxpayers Guide to LLCs and S Corps
Expat and Expatriate KB
Rental Property KB
Other Tax Information KB
Small Business KB
- Articles coming soon
Negative Qualified Business Income
By Jason Watson, CPA
Posted Wednesday, November 1, 2023
If you have qualified business income that would normally enjoy a Section 199A deduction, and that income is negative, it must be netted against other income. This is another cops and robbers anti-abuse provision since it would be very easy to split an entity into two, drive income way up in one, grab your Section 199A deduction, and then net the incomes together to reduce taxable income from the businesses. A double dip of sorts. Yes, you would need other income sources to ensure the taxable income Section 199A limit on the tax return is not triggered to play out this game, but the IRS eliminated the temptation. Good idea, right?
There are some specific rules on how this works, but you get the general concern.
Taxpayer's Comprehensive Guide to LLCs and S Corps 2023-2024 Edition
This KB article is an excerpt from our 400+ page book (some picture pages, but no scatch and sniff) which is available in paperback from Amazon, as an eBook for Kindle and as a PDF from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or visit our webpage which provides more information at-