You should report the loss. The screen Enter Box 2 info reports, in your case, a loss to your tax return.
Other answers in other parts of the tax return will determine whether that loss will offset other income in your tax return or be carried over to next year as a passive loss. These are all issues related to taxable income.
The screen Enter Box 20 info asks you to select code Z Section 199A information. Code Z tells the software that qualified business income information needs to be entered at the screen We need some information about your 199A income. Select Code Z and enter $0. Click Continue.
When you enter information at the screen We need some information about your 199A income, the software is determining whether and how this income will affect the Qualified Business Income Deduction computations. Now we have moved away from taxable income to the the Qualified Business Income Deduction.
This individual entry is a loss but it could offset Qualified Business Income reported elsewhere in the tax return. If there is no other Qualified Business Income in the tax return, the loss is carried forward to offset Qualified Business Income in a subsequent year's tax return.
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