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zncu
Level 2

Turbotax does not include unadjusted basis of home office in UBIA

I am self-employed, with a non-SSTB business that I operate out of my home. In determining the QBI deduction, Turbotax does not seem to include the unadjusted basis of home as part of the UBIA. This part of TT is rather opaque, but I have deduced that the only assets included are computers/equipment. I believe that the percentage of home used as home office should be included in the UBIA. This is important because the total UBIA will affect the phaseout value of the QBI deduction. Is there a way to force TT to do this?

1 Best answer

Accepted Solutions
DavidS127
Expert Alumni

Turbotax does not include unadjusted basis of home office in UBIA

I was able to replicate your situation in TurboTax Home and Business.  Use Forms mode (icon top right in blue bar) to enter a workaround.

 

On the "Asset Entry [name]" form titled Form 8829 Asset Entry Worksheet, Section 199A (QBI Deduction Attributes) section at bottom of form, first line is Unadjusted Basis Immediately After Acquisition (UBIA) for this asset, and will be populated with the UBIA for your home office. 

 

Ostensibly, that number should “flow” to Schedule C, Qualified Business Income Deduction Smart Worksheet (after line 48), line J1.  But, line J1 is blank, i.e., the UBIA of the home office does not “flow” from Form 8829 Asset Entry Worksheet, Section 199A (QBI Deduction Attributes) section.  

 

If the amount of the home office UBIA from the Form 8829 Asset Entry Worksheet(s) is entered as an “adjustment” on line J2 of the Schedule C, Qualified Business Income Deduction Smart Worksheet, the income limitation calculation on the QBI Component [name] form includes the UBIA of the home office.

 

@zncu

@AmeliesUncle

 

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5 Replies
DavidS127
Expert Alumni

Turbotax does not include unadjusted basis of home office in UBIA

Did you use the Simplified Method or the Actual Method to report the use of your home for business?

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AmeliesUncle
Level 13

Turbotax does not include unadjusted basis of home office in UBIA


@zncu wrote:

 a non-SSTB business


Unless I'm forgetting something, non-SSTB businesses don't phase out, and UBIA does not matter.

 

[EDIT:  Thanks for the correction, my brain is crammed with the CARES Act information I forgot how 199A worked.  😁  ]

zncu
Level 2

Turbotax does not include unadjusted basis of home office in UBIA

 

@DavidS127 Actual

 

@AmeliesUncle Non-SSTBs do indeed phase out, from a QBI deduction of 20% of QBI to (25% W2 wages + 2.5% UBIA). SSTBs phase out to zero, that's the key difference. Turbotax does compute the non-SSTB phaseout correctly - it's just that the UBIA is much lower than it could be, because the home office portion of the house is not getting included. So the phaseout is much steeper than it ought to be.

DavidS127
Expert Alumni

Turbotax does not include unadjusted basis of home office in UBIA

I was able to replicate your situation in TurboTax Home and Business.  Use Forms mode (icon top right in blue bar) to enter a workaround.

 

On the "Asset Entry [name]" form titled Form 8829 Asset Entry Worksheet, Section 199A (QBI Deduction Attributes) section at bottom of form, first line is Unadjusted Basis Immediately After Acquisition (UBIA) for this asset, and will be populated with the UBIA for your home office. 

 

Ostensibly, that number should “flow” to Schedule C, Qualified Business Income Deduction Smart Worksheet (after line 48), line J1.  But, line J1 is blank, i.e., the UBIA of the home office does not “flow” from Form 8829 Asset Entry Worksheet, Section 199A (QBI Deduction Attributes) section.  

 

If the amount of the home office UBIA from the Form 8829 Asset Entry Worksheet(s) is entered as an “adjustment” on line J2 of the Schedule C, Qualified Business Income Deduction Smart Worksheet, the income limitation calculation on the QBI Component [name] form includes the UBIA of the home office.

 

@zncu

@AmeliesUncle

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
zncu
Level 2

Turbotax does not include unadjusted basis of home office in UBIA

@DavidS127 This worked perfectly! Many thanks! 

 

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