No, your rental loss qualifies for the QBI Carryover. If your income was not eligible for QBI your K-1 box 20 would not have a code Z line. TurboTax asks you to resolve the code Z entry is because the entire entry is not complete. If you enter the loss in the rental income and the 1231 gain on the screens after the entry for box 20, you should be able to proceed.
@JC049
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