First of all, a disclaimer: Just because I did this, doesn’t mean it’s right. Do your own research. Further, this article won’t be useful to the vast majority of taxpayers for several reasons:
This is income from a specialized kind of investment (Real Estate investment Trust, or REIT).
People with complicated situations like to take their taxes to a professonal to do, who will use software.
Even without a complicated situation, most people use software like TurboTax, where they just enter all this information, and the software does the right thing.
But I’m an odd bird, and like to do my taxes manually, using software only for checking.
Box 5 had a nonzero amount on last year’s 1099-DIV. But WTF is Section 199A? The instructions included with this statement said to see the instructions for Form 8995.So I got the 6-page 8995 instructions. Here is an excerpt from page 1. Are you kidding me!!?? I had to use Google to figure out what this all meant.I found this gem on page 3 of the instructions. I took it to mean that if my investment house put the number in box 5, that meant that they already determined that it was a qualified REIT dividend.Ultimately, the amount went on line 6 of form 8995. There were worksheets and flowcharts to go through in the instructions, but in the end, all the boxes that I didn’t understand at first did not apply, and I left them blank. I had to compute and fill in the values for lines 11 and 12, which were basically the numbers off the first page of my 1040 without alteration. And the rest of the computations for the form were easy. Note that the numbers here are rounded to whole dollars. Tax deduction, $13. Final savings on taxes, just enough to get a hotdog and drink from Costco. Put another way, 90ยข an hour for my work figuring it out.
