On March 23, 2018, President Trump signed into law the Consolidated Appropriations Act, 2018 (P.L. 115-141). Among other changes to the Internal Revenue Code (IRC), this bill included a fix to the so called “grain glitch,” which occurred when IRC section 199 was repealed under Tax Cuts and Jobs Act (TCJA) in 2018. This guidance is for Specified Agricultural and Horticultural Cooperatives claiming the IRC section 199A(g) deduction (New DPAD). For tax years 2019 and later, qualifying co-ops will generally be allowed to claim 100% of the federal 199A(g) deduction and will be required to take 100% of any reduction to the cooperative’s IRC section 1382 deduction resulting from the new DPAD allocated to patrons for Iowa purposes.
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