QBI vs. ordinary passive income in an MLP

[mlpinvestor]

I have a couple of questions about QBI in a master limited partnership.

One of my MLPs had positive ordinary business income last year, rather unusual for a midstream MLP.  This freed up some prior year accumulated passive losses.  What has me confused is the fact that, according to Turbotax Premier, the amounts freed up are different with respect to “regular tax” vs. 199A QBI carryovers.  I don’t understand why this should be.  Specifically, the suspended loss carryovers that Turbotax freed up for QBI purposes amounted to $740, which just so happens to be double the $370 of ordinary business income for 2023.  What’s going on here?  I must not understand how this calculation works.

For reference, below are the relevant portions of my 2023 K-1.

Secondly, notice that the QBI amount in Box 20Z does not equal the ordinary business income plus 1231 income.  I thought this was the literal definition of QBI, so I don't understand the discrepancy here, and hence what to even report as QBI in the Turbotax interview for this MLP this year.

(PII Removed)

[EleanoreS]

It is difficult to provide a concise answer without seeing your actual Schedule K-1 and TurboTax input. That being said, I am providing information regarding the Qualified Business Income  (QBI) deduction in general.

When looking at your individual situation, please keep in mind that the QBI deduction is calculated differently based on your taxable income. In addition, at higher income levels, the deduction may be reduced or eliminated.  

Here is a link to information and a video on how to input the information from your K-1s.  As you feel a number is being doubled, please double check your input to be sure the data was not entered twice.  

Thank  you for joining us at the Ask the Expert event today!

[FranklinF]

You may have a Negative QBI in the year you deduct them due to suspended losses,

QBI's from different sources interact with each other. Negative QBI from one source offsets positive QBI from other sources. An overall negative QBI for a given year would be carried forward to offset positive QBI in future years.

As for the amount that is being doubled, I will advise to review your previous entries for duplicate inputs.

In addition, section 1231 Gains or Losses are included in QBI's calculations only when they are not considered Capital Gains.

Lastly, for a response that may more adequately address your particular circumstances, I will advise to sign for Turbo Tax Live Assistance, especially  if you are dealing with issues that may include navigational challenges.

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