What a wonderful explanation Monika! I had no doubt that there was a reason for it. I actually changed the entry from QBI to passive. So, this explains the reduction to zero. This is what I thought was appropriate.
However, the way the program went about changing it was weird and confusing. I entered my expense values and the program changed my entries (proportionally) in Schedule E to make the outcome zero (equal to the income). Contrary to other places in the interview, it didn't tell me it was doing this. I had to actually look at the 1040 form (Schedule E) to see that it had been capped and the entries changed. By contrast, the state tax limit section has a pop up that clearly shows that the cap has been done and a link to the tax code section so that you can see what has taken place. The rental section has no such alerts. Someone should tell the programmers to add this for clarity. But, again, I really appreciate the explanation!
