DavidS127
Expert Alumni

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The issue of QBI carryforward is a new thing in 2019, because the QBI deduction just started in 2018.  Now, for the first time, QBI losses from the previous year (2018) are being used to offset QBI income in the current tax year (2019).

 

When you have a business that qualifies for the Qualified Business Income (QBI) deduction, your deduction is based on the income of the "QBI business".  No QBI business income, no deduction.  And, if you have a loss on your QBI business, that loss gets tracked and "carried forward" to be offset against next year's QBI business income when calculating that next year's QBI deduction.

 

This is true even if the losses were passive.  Passive losses for a QBI business (from 2018 forward) will be tracked until the year the loss is included in taxable income.  So, it could be that your passive losses for a QBI business from 2018 are generating this error.  You may need to find any carryforward amounts in your 2018 tax return for your QBI businesses, and separately report the passive ones that can only offset passive income.

 

The IRS instructions for reporting "Loss Netting and Carryforward" are in the instructions for Form 8995...

 

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