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r2d2-7
Level 1

How do I calculate QBI Adjustment on LLC Partnership in Turbo Tax Business?

Using TT Business for our 1065 return.  Asking us to fill in 199A Worksheet amount for QBI adjustment.  Total income $36,000.  How do we calculate what to put there?  We are a Qualified Business.

1 Best answer

Accepted Solutions
JulieCo
New Member

How do I calculate QBI Adjustment on LLC Partnership in Turbo Tax Business?

If you are not aware of any adjustment that needs to be made, then you do not have to record anything in the adjustment fields.  If this screen is displaying during a "review", then scroll down to make sure Question 4 is answered as to whether the business is a Specified Service Trade or Business or not.  An answer needed for Question 4 is the reason that the form is displaying upon review as an error.

Below is the tax guidance for the 199A Worksheet:

This worksheet collects the information needed to calculate the Qualified Business Income (QBI) deduction for this activity.

Most fields are calculated from amounts found elsewhere in this return. (See Data Source Help for the source of specific calculated entries.)

The program assumes Salaries and Wages entered in multiple areas of the return represent Section 199A W-2 Wages. However, special rules apply to the calculation of W-2 wages and the amount of wage expense entered may not represent W-2 wages for this purpose. For example, W-2 wages from Statutory Employees should not be included in Section 199A W-2 wages. Refer to section 6051(a)(3) and (8) for more information. Use the adjustment field on Line 2b to modify the amount included as Section 199A W-2 Wages.

Line 3 - Unadjusted Basis Immediately after Acquisition (UBIA) is needed in the Section 199a calculation for shareholders with taxable income above the income threshold amounts. If this business holds qualified business property that is not entered on the Asset Entry Worksheets, or if the initial cost basis of property on the Asset Entry Worksheets is not the correct value to use as the UBIA, then make any appropriate adjustments to the UBIA amount in the adjustments field on Line 3b.

For purposes of identifying UBIA:

Qualified property is tangible property subject to depreciation which is (i) held by, and available for use in, a qualified trade or business at the close of the taxable year, (ii) used at any point during the taxable year in the production of Qualified Business Income, and (iii) has a depreciable period that has not ended before the close of the taxable year.

The depreciable period is the period beginning on the date the property was first placed in service and ending on the later of (i) the date that is 10 years after such date, or (ii) the last day of the last full year in the applicable recovery period that would apply to the property.


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4 Replies
JulieCo
New Member

How do I calculate QBI Adjustment on LLC Partnership in Turbo Tax Business?

If you are not aware of any adjustment that needs to be made, then you do not have to record anything in the adjustment fields.  If this screen is displaying during a "review", then scroll down to make sure Question 4 is answered as to whether the business is a Specified Service Trade or Business or not.  An answer needed for Question 4 is the reason that the form is displaying upon review as an error.

Below is the tax guidance for the 199A Worksheet:

This worksheet collects the information needed to calculate the Qualified Business Income (QBI) deduction for this activity.

Most fields are calculated from amounts found elsewhere in this return. (See Data Source Help for the source of specific calculated entries.)

The program assumes Salaries and Wages entered in multiple areas of the return represent Section 199A W-2 Wages. However, special rules apply to the calculation of W-2 wages and the amount of wage expense entered may not represent W-2 wages for this purpose. For example, W-2 wages from Statutory Employees should not be included in Section 199A W-2 wages. Refer to section 6051(a)(3) and (8) for more information. Use the adjustment field on Line 2b to modify the amount included as Section 199A W-2 Wages.

Line 3 - Unadjusted Basis Immediately after Acquisition (UBIA) is needed in the Section 199a calculation for shareholders with taxable income above the income threshold amounts. If this business holds qualified business property that is not entered on the Asset Entry Worksheets, or if the initial cost basis of property on the Asset Entry Worksheets is not the correct value to use as the UBIA, then make any appropriate adjustments to the UBIA amount in the adjustments field on Line 3b.

For purposes of identifying UBIA:

Qualified property is tangible property subject to depreciation which is (i) held by, and available for use in, a qualified trade or business at the close of the taxable year, (ii) used at any point during the taxable year in the production of Qualified Business Income, and (iii) has a depreciable period that has not ended before the close of the taxable year.

The depreciable period is the period beginning on the date the property was first placed in service and ending on the later of (i) the date that is 10 years after such date, or (ii) the last day of the last full year in the applicable recovery period that would apply to the property.


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r2d2-7
Level 1

How do I calculate QBI Adjustment on LLC Partnership in Turbo Tax Business?

Great answer!  Thanks so much for your thoroughness and for actually giving REALLY useful and easy to comprehend information!!!
rootsmusic
Level 3

How do I calculate QBI Adjustment on LLC Partnership in Turbo Tax Business?

@JulieCo, where's the tax guidance found?  Thanks.

MarilynG1
Employee Tax Expert

How do I calculate QBI Adjustment on LLC Partnership in Turbo Tax Business?

@rootsmusic  Click this link for IRS Tax Guidance for 199A QBI Deduction

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