Dan Posted January 30, 2020 Report Posted January 30, 2020 I have a 1099-Patr in my possession that has these amounts: Box 1: Patronage Dividends = $2537.31 Box 6: Domestic Production Activities Deduction = $3215.10 Box 3: Per Unit Retain Allocations = $134577.50 Box 7: Qualified Payments = $134577.50 There is no 1099-Patr in the ATX program so where do you enter the amounts above? I know where you enter Box 1, but where do you put Box 6, 3, and 7? Looking for your early reply Quote
Gail in Virginia Posted January 30, 2020 Report Posted January 30, 2020 Is this a 2019 return? I thought that Domestic Production Deduction was completely gone this year. But maybe i missed it in the list of extenders. Box 6 does to line 23 on form 8903. I believe that box 3 and box 7 in this case offset each other and don't need to be reported. But I am not certain of that. All this is based on the assumption you are preparing a farm return. Quote
Dan Posted January 30, 2020 Author Report Posted January 30, 2020 Yes, it is a 2019 farm return. Quote
Dan Posted January 30, 2020 Author Report Posted January 30, 2020 At the top of form 8903 it says in red letters: "Note: DPAD has been repealed for tax years beginning after 2017. Review form 8903 instructions before filing with your return." Quote
DANRVAN Posted January 30, 2020 Report Posted January 30, 2020 There is still a version of DPAD for certain farm coop's, which is passed through to farmer patrons. See 199A(g). I think you have to force the deduction from 8903 to line 8 of schedule 1 for 2019. 1 Quote
DANRVAN Posted January 30, 2020 Report Posted January 30, 2020 7 hours ago, Gail in Virginia said: I believe that box 3 and box 7 in this case offset each other and don't need to be reported. Haven't dealt with this yet for 2019, but believe box 3 needs to be reported as in the past, basically sales to the coop. https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs Quote
Dan Posted February 1, 2020 Author Report Posted February 1, 2020 I have a 1099-Patr in my possession that has these amounts: Box 1: Patronage Dividends = $2537.31 Box 6: Domestic Production Activities Deduction = $3215.10 Box 3: Per Unit Retain Allocations = $134577.50 Box 7: Qualified Payments = $134577.50 Question: Do you need to do anything with boxes 6, 3, and 7 if taxable income is less than $315,000? Quote
Dan Posted February 1, 2020 Author Report Posted February 1, 2020 I am thinking that maybe Box 7 "Qualified payments should go on Schedule F, line 2." Quote
DANRVAN Posted February 1, 2020 Report Posted February 1, 2020 8 hours ago, Dan said: Question: Do you need to do anything with boxes 6, 3, and 7 if taxable income is less than $315,000? Box 3 is the gross sales to the COOP, it needs to be reported as a patr dividend on schedule f, otherwise client gets a CP-2000. Since box 3 is gross sales, you need to account for storage, handling etc to reconcile to the net cash received. Line 3 is an allowable DPAD under 199-A(g) for the coop patron. A QBID might also be allowed, but the QBID must be reduced by a "patron reduction" per 199A(b)(7). As I understand it , the patron reduction is the lessor of : A. 9% of QBI allocated to qualified payments or B. 50% of W-2 wages with respect to the QBI allocated to qualified payments. It appears to me that the qualified payments referred to the amount from Box 7. This comes from the proposed reg of June 18, 2019. I haven't been down that road yet, but it appears the QBI reduction for the patron is computed on Schedule D of form 8995-A. 1 Quote
DANRVAN Posted February 1, 2020 Report Posted February 1, 2020 19 minutes ago, Dan said: I am thinking that maybe Box 7 "Qualified payments should go on Schedule F, line 2." It looks to me like box 7 is used to calculate a reduction of QBID for the patron on FORM 8895-A. See my post above. Quote
DANRVAN Posted February 2, 2020 Report Posted February 2, 2020 Sect 199A(g) allows the modified DPAD for Coops and patrons since the coop is a corporation that does not qualify for 199A Quote
JackieCPA Posted February 3, 2020 Report Posted February 3, 2020 I put the DPAD on the 8995-A, it keeps the original QBID on the 8995. Are these supposed to be on the same form? If so, how do i get ATX to let me put the regular QBID on the 8995-A? Quote
Dan Posted February 8, 2020 Author Report Posted February 8, 2020 I have a 1099-Patr in my possession that has these amounts: Box 1: Patronage Dividends = $2537.31 Box 6: Domestic Production Activities Deduction = $3215.10 Box 3: Per Unit Retain Allocations = $134577.50 Box 7: Qualified Payments = $134577.50 There is no 1099-Patr in the ATX program so where do you enter the amounts above? I know where you enter Box 1, but where do you put Box 6, 3, and 7? Looking for your early reply What is interesting here is that the amount in box 3 and box 7 is the same amount as gross farm wheat sales. It is not patronage dividends because the patronage dividends is in box 1 as shown above. Patronage dividends goes on line 3a and 3b on schedule F. Crop sales goes on line 2. I still don't know how to take care of Box 6, 3, 7. Quote
Dan Posted February 9, 2020 Author Report Posted February 9, 2020 Danrvan: Box 3 is the gross sales to the COOP. I read this article from Clifton Larson Allen in Farm Tax Network which said, "The IRS is reviewing individual income tax returns to determine if income reported on Form 1099-PATR has been reported by the taxpayer. Taxpayers selling product to cooperatives may find the cooperative reporting those sales as Per Unit Retains." That seems to say to me that Box 3 would be reported on line 2 on schedule F. It looks to me like box 7 is used to calculate a reduction of QBID for the patron on FORM 8895-A. (Where do you put this on the form?) Quote
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