An Overview of Section 199A and the Tax Cuts and Jobs Act

One of the most controversial parts of the Tax Cuts and Jobs Act of 2017 was the creation of a deduction for pass-through business income.
Known as the “pass-through deduction” or “Section 199A,” this provision will reduce taxes for more than 17 million households that receive income from pass-through businesses – companies that are not subject to the corporate income tax. The deduction is expected to lower federal revenue by $414 billion over the next 10 years.

Supporters of the deduction argue that it delivers much-needed tax relief to American businesses and helps put the pass-through sector on an equal footing with the largest multinational corporations. Opponents of the provision contend that it creates an arbitrary tax preference for pass-through business income over other sources of income, and that it overwhelmingly benefits wealthy households.

Speaker

Jack C. Butler

Partner, Carlile Patchen & Murphy LLP

Jack Butler is a partner at Carlile Patchen & Murphy LLP and he concentrates on business matters and tax law. He focuses on company (corporate, LLC and JV) representation including: establishment, venture structuring, business relationship agreements, governance, and ongoing services; M&A transactions; debt and equity financings; captive insurance companies; business advisory; transaction planning and structuring; syndications; business succession planning; tax planning; and taxpayer representation. Jack has represented and provided legal services for start-up companies, small to large privately held companies, and large (NYSE) companies. His experience spans multiple industries, including: agriculture; engineering and architecture; manufacturing; food services; health care providers; IT and hard sciences technology; distribution; insurance agencies; vehicle dealerships; real estate; and venture and private equity financing.