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Get your taxes done using TurboTax
Of course I have been unable to let this issue go, and thought I would try again. After further effort, I can get TT to fill in Form 8995 correctly but then the 2022 Carryover is incorrect. So, I played with some numbers removed everything from the MMP K-1 except the 2021 Box 1 Income (loss) of -865, and here is what I found:
If the value of K-1, Part III Line 1 is zero or positive, then the QBI of Section D1, E1 income (loss) of -865 works. That is, Line 3a is -865 and Line 4a and 4c are -865. This flows all the way to Line H5 PTP income of -865. This also flows to Form 8995, Line 6 as -865. The issue with the process is the 2022 Carryover no longer includes the -865 current year loss.
However, If K-1, Part III Line 1 is any negative number (in my case -865), then QBI income (loss) of Section D1, E1 of -865 does not work. That is, Line 3 is -865 but Line 4a and 4c is 0. This flows to Line H5 PTP income of value of zero. This also flows to Form 8995, Line 6 as zero. Here the 2022 Carryover does include the -865.
It seems that Section D1, E 4a “Calculated QBI allowed after At-Risk/Passive Limits” will not allow a negative QBI value if K-1, Part III Line 1 is negative. I do not see that my At-Risk/Passive Limits should be causing the QBI income (loss) value of -865 to be limited back to zero.
Does this analysis provide any insight to the problem? It would seem a TT bug (unlikely) or I am missing something.