The Deduction for Qualified Business Income of Pass-through Entities under Section 199A

Abstract

This paper reviews the new Section 199A deduction for pass-through entity income, and the revised C
corporation tax rate under The Tax Cuts and Jobs Act of 2017. The revised long-term capital gains tax
rates that apply to dividend distributions, and the revised individual tax rates for pass-through entity
income are also examined. This paper provides a comparison of the total tax burden of C corporations as compared to pass-through entities under the assumption that 100 percent of after-tax C corporation income is distributed to the shareholders.