When entering your K-1 (Form 1065), you will complete line 20, and it will ask for this information when code Z is used. This term is used in connection with the qualified business income deduction (QBID) and is used to determine your eligibility and amount of the deduction allowed.
Unadjusted Basis Immediately After Acquisition (UBIA) is referencing the total cost of all the assets of the business at the amount of cost at the time they were placed in service without regard to the depreciation expense.
Qualified Business Income
- The qualified business income deduction (QBID) may be taken by eligible taxpayers, including individuals and some trusts and estates. The deduction is determined at the partner level. Partnerships are required to report information necessary for their partners to figure the deduction. Use code Z with an asterisk (Z*) on each partner’s Schedule K-1 and enter “STMT” in the entry space to indicate that the information is provided on an attached statement that separately identifies the partner’s distributive share of:
- Qualified items of income, gain, deduction, and loss;
- W-2 wages;
- Unadjusted basis immediately after acquisition (UBIA) of qualified property;
- Qualified PTP items; and
- Section 199A dividends, also known as REIT dividends.
Other items reported on this line can be reviewed to see if any are applicable to your partnership return.
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