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New Member
posted Feb 18, 2020 11:21:07 AM

Not sure what this means for the small side farm that brings in a very small amount. The line "Previously disallowed QBI losses to be reported as separate businesss"

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Expert Alumni
Feb 18, 2020 11:45:55 AM

If you do not have a second business, then you do not want it reported separately. If you have a second business, the IRS says in QBI FAQs

 

"Q18. If I have net income from one qualified business and a net loss from another qualified business, is the loss from the second business carried forward and applied against that same business in the future or is it netted against the income from the first business when calculating the deduction? What if the losses are greater than the income, does this mean I will not get a deduction?

A18. A taxpayer must net their QBI, including losses, from multiple trades or businesses (including aggregated trades or businesses). So, negative QBI from one business will offset positive QBI from other trades or businesses (including aggregated trades or businesses) in proportion to the net income of the trades or businesses with positive QBI.

If the total QBI from all trades or businesses is less than zero, the taxpayer's QBI Component will be zero and any negative amount is carried forward to the next taxable year. The carried forward negative QBI will be treated as negative QBI from a separate trade or business for purpose of determining the QBI Component in the next taxable year."