Sec 199A dividends

[Terry5]

One of my individual client brought in Form 1099-DIV that shows dividends in box 1, the same number in box 2 (qualified div) and the same amount in box 5 (Sec 199A Div).

I know that the company that paid dividends and issued the form 1099-DIV is not REIT or RIC. It is a construction company. I researched Sec 199A, and to my understanding, only dividends paid by REIT's or RIC's qualify for this special 20% deduction. But I am not sure about it? I need backup. 

Should I claim 20% deduction on the taxpayer 1040? Or should I talk to the client about it?

Please help. Thank you.

[itonewbie]

Have your client or get authorization to speak with the brokerage if you are doubtful.

[BobKamman]

I don't think this came from a broker, I think it came from the company itself, whose bookkeeper may also drive the backhoe and be an owner's son-in-law.  The same dividend can't be both "qualified" (for the LTCG tax rate) and Section 199A.  Ask the client if the company later sent out a corrected 1099-DIV, or is aware of the problem.  

[itonewbie]

No, it doesn't come from the broker but they receive the info from the company paying the dividend.  It is also not unusual that dividends are reclassified at the end of the year.  Contacting the broker would be the first step.

[BobKamman]

What I am trying to say is that the 1099-DIV was issued directly to the shareholder by the company itself.  No broker involved, no stock certificate held in street name, no registered security.  Out here in the real world, believe it or not, that happens a lot.  

[itonewbie]

Don't disagree with that.  It could happen either way in the real world.

[Terry5]

Thank you to everyone for your help. I made the client aware of the issue. He finally responded. There is no broker involved. He spoke to the company's accountant and was told the form is correct. So these are qualified dividends and also 20% deduction dividends. Too good to be true. What would you do? Ignore box 5?  I think I am going to claim it -- I am not responsible for the form 1099-Div.  But, on the other hand, the form is wrong, and the difference in tax is almost 10K.