Qualified Business Income Deduction

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My rental income is received through a trust. I am trying to get the QBI deduction on my individual return but TurboTax is requiring me to enter the rental income on my personal return. How do I get the QBI deduction without entering the rental income twice (i.e. once on trust return and once on personal return)?

KarenM90

Level 11

Rental properties are usually treated as passive activities, and passive activities are excluded from the definition of a qualified trade or business.

However, rentals that qualify as trades or businesses (generally Real Estate Professionals) under IRC § 162 are not considered passive, which means they could potentially qualify for the QBI deduction.

Here is a Turbo Article related to QBI for Rental Income: QBI on Rental Income

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snester24Author

Level 2

Thanks Karen!

I read the article related to QBI on Rental Income and we would qualify for the QBI deduction (via the Everybody Else, subheading).

Do you have any knowledge as to how we would recognize the deduction on a 1040 in TurboTax without recognizing the income (as it is already recognized on the trust return)?

DavidS127

Alumni - Intuit

You recognize your QBI deduction from a trust, without recognizing additional income on the Form 1040, via the entries you make in TurboTax for the box 14 code I (as in India) Section 199A information that came with your Form 1041 Schedule K-1.

You'll need to put the information on each of the K-1 statements into the categories shown in the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens (see two screenshots later in this post).

To get back to the K-1 summary screen and find the Schedule K-1 to edit, click the "magnifying glass Search" icon on the top row, enter "k-1" in the search window and press return or enter, and then click on the "Jump to k-1" link to find the K-1 you need to edit.

Here are screenshots for the "We need some information about your 199A income or loss" and "Let's check for some uncommon adjustments" screens where you enter the information from your K-1: