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Section 199 Deduction Opportunities for U.S. Real Estate


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Section 199 eBrochure

The Section 199 deduction provides domestic real estate developers and domestic construction companies an opportunity to reduce their tax rate. Our Deloitte Tax LLP professionals have helped many real estate developers and homebuilders assess their opportunities for Section 199 and implement recurring compliance solutions.

This team includes specialists who understand the challenges that domestic real estate developers and construction companies face in qualifying for the Section 199 deduction. For example, the deduction is based on revenue derived from construction services performed and/or sale of constructed real property in the United States. Determining which types of activities qualify, however, is a very complex issue in the construction industry. Identifying which proceeds must be carved out of your calculation also can pose problems.

Our consultation services address all aspects of the Section 199 deduction, including:

  • Identifying and documenting qualifying revenue
  • Assisting with prefiling agreements
  • Analyzing partnerships, joint ventures and international structures, as well as buy-in payment arrangements
  • Analyzing cost allocations
  • Conducting scenario planning and validation
  • Performing tax rate impact analysis
  • Assisting with tax compliance and Internal Revenue Service exams

For more information, see the PDF attached below.

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