Question

Allowing a qualified business income deduction for certain pass-through business income can be justified: A) As mitigating the effect of the annual accounting period concept. B) By strictly political considerations. C. By economic considerations. D. By social considerations.

Answer 1

Solution:-

Allowing a qualified business income deduction for certain pass-through business income can be justified:-

B) By strictly political considerations.

Explanation:-

While the purpose of Sec. 199A is clear, its statutory construction and legislative text is anything but clear. The provision is rife with limitations, exceptions to limitations, phase-ins and phaseouts, and critical but poorly defined terms of art. As a result, Sec. 199A has created ample controversy since its enactment, with many tax advisers anticipating that until further guidance is issued, the uncertainty surrounding the provision will lead to countless disputes between taxpayers and the IRS. Adding concern is that, despite the ambiguity inherent in Sec. 199A, Congress saw fit to lower the threshold at which any taxpayer claiming the deduction can be subject to a substantial-understatement penalty.