DavidS127
Expert Alumni

Deductions & credits

Royalties are generally eligible for the Qualified Business Income if the "source" is eligible. 

 

So, even royalties for a rental activity qualify if the rental activity is designated as a Section 162 trade or business or you are using the QBI Safe Harbor for rental activities.

 

If the royalties are earned by the trust itself, e.g., reported on a Schedule K-1 received by the trust, they are QBI eligible.

 

In Forms mode of your TurboTax Business (icon top right in blue bar), find the "source" form for the royalties in the list of forms on the left (i.e., Schedule K-1 received by the trust). Scroll down on that source form until you find the Qualified Business Income Deduction Worksheet.  There will be a line for "QBI worksheet to report".  Double click the "box" on that line and you'll create a QBI Component worksheet.  That will "clear" your error.

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