Watch Benjamin M. Willis, contributing editor with Tax Notes Federal, and Jed Bodger, vice president of taxation at the Sierra Nevada Corp., discuss their recent article examining how the Biden-Harris proposed corporate tax and long-term capital gains rates increases logically lead to eliminating all or part of section 199A passthrough deduction to mitigate tax rate disparities and choice of entity gamesmanship.
Here are a few highlights . . .
On the goals of section 199A
Jed Bodger: [Section 199A] creates disparity and different rate pools for different types of businesses. On a broad scale, section 199A is a tax deduction for passthrough entities like partnerships, [limited liability companies], and S corporations, and it is available for qualified trades and businesses.
What section 199A does is provide a 20 percent deduction for qualified business income, which reduces the overall effective rate for members or partners of these passthrough entities from