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Elected Farm Income May be Used to Figure QBI

The IRS has explained how farmers and fishermen who use the income averaging method compute their Section 199A qualified business income (QBI) deduction. One of the requirements for qualified items of income, gain, deduction and loss is that the item is "included or allowed in determining taxable income for the tax year.” In a post on its website on April 19, the IRS said in figuring the QBI deduction, income, gains, losses and deductions from farming or fishing should be taken into account, but only to the extent that the deduction is attributable to your farming or fishing business and is included in elected farm income on line 2a of Schedule J (Form 1040).



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