It depends. The number "1" in that box most likely comes from information you've entered elsewhere in your return, particularly when dealing with Section 199A (Qualified Business Income Deduction). When the software detects that your rental property might qualify for that deduction as part of a Rental Real Estate Enterprise under Rev Proc 2019-38, it will auto-populate this field. The number "1" typically refers to a group number within that enterprise, which is the property that is owned by the LLC.
TurboTax is essentially trying to determine if your property is part of a Qualified Real Estate Enterprise and if it should be treated for purposes of Section 199A. This could be populated if you:
- Entered rental properties under an enterprise (like a grouping of rental activities) that fits the Rev Proc guidelines.
- Provided information indicating that your rental activities are part of a real estate enterprise that is eligible for Section 199A treatment.
If you’re unsure why the number "1" is there, and you don’t think your rental is part of a Rev Proc 2019-38 enterprise, then you can likely clear the number and proceed. However, if you are confident that your rental qualifies for that treatment or are unsure whether it does, keeping the number is probably the safest option. TurboTax is flagging it as part of the process for claiming the Qualified Business Income Deduction.
Important note: The red shaded box indicating a required checkbox typically means the system wants you to confirm whether the rental is part of a Rental Real Estate Enterprise.
My suggestion is for you to check the box and leave the number "1" in there. Check line 13 on your 1040 to see if there is a QBI deduction listed in that line. See if this will clear up your error messages and red flags. Let us know if this works.
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