Sec 199A dividends

Forum|Forum|6 years ago
June 17, 2020
1 reply
10 views

One of my individual client brought in Form 1099-DIV that shows dividends in box 1, the same number in box 2 (qualified div) and the same amount in box 5 (Sec 199A Div).

I know that the company that paid dividends and issued the form 1099-DIV is not REIT or RIC. It is a construction company. I researched Sec 199A, and to my understanding, only dividends paid by REIT's or RIC's qualify for this special 20% deduction. But I am not sure about it? I need backup.

Should I claim 20% deduction on the taxpayer 1040? Or should I talk to the client about it?

Please help. Thank you.

ProConnect Tax Online

This topic has been closed for replies.

itonewbie

Level 15

Have your client or get authorization to speak with the brokerage if you are doubtful.

---------------------------------------------------------------------------------Still an AllStar

BobKamman

Level 15

I don't think this came from a broker, I think it came from the company itself, whose bookkeeper may also drive the backhoe and be an owner's son-in-law. The same dividend can't be both "qualified" (for the LTCG tax rate) and Section 199A. Ask the client if the company later sent out a corrected 1099-DIV, or is aware of the problem.

itonewbie

Level 15

No, it doesn't come from the broker but they receive the info from the company paying the dividend. It is also not unusual that dividends are reclassified at the end of the year. Contacting the broker would be the first step.

---------------------------------------------------------------------------------Still an AllStar

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