Section 199A Report

Purpose

The Section 199A Report calculations are based on the depreciation of UBIA (Unadjusted Basis Immediately after Acquisition) qualified property. This amount is used as a component in calculating the Qualified Business Income (QBI) deduction under IRC Code Section 199A.

The report applies the Section 199A rules based on the assets’ placed-in-service date and other factors to determine 199A qualifying assets as of the report run date.

Tip: For report accuracy, you must depreciate assets through the report run date before running the report.

This report presents assets in up to three sections. The first two sections, Category I and Category II assets, are included in the Section 199A amount and used to calculate the “Qualified Property Amount – 2.5%” for the QBI deduction.

The third section displays the remaining assets from the group selected when running the report that do not qualify for the 199A calculation. To include these assets in the report check the box “Display assets not included in the 199A calculation”. Assets with a Property Type of Z (amortizable), a Depreciation Method of NO (not depreciating), and active assets that no longer qualify for the 2.5% calculation as of the report run date are in this final section of the report.

If you choose the to run all three sections of the Section 199A Report, the end of the report will include the Grand Totals for the Acquired Value and Acquired 199A Value columns for all three sections. The Grand Total of the Acquired Value column can be used to reconcile the Section 199A Report to the Depreciation Expense Report, provided it is run for the same period and with the same group.

For more detailed information on qualified assets, asset categories, and other important information about the Section 199A Report see Knowledgebase article 230515170726533.