DavidS127
Expert Alumni

Business & farm

Your qualified business income (QBI) deduction is based on the net QBI income on your tax return.  If the net QBI on your tax return is a loss, you won't get a QBI deduction for that year.

 

If you have another QBI business (not a Publicly Traded Partnership (PTP) or Real Estate Investment Trust (REIT)) the QBI from that business will be netted against the loss from this Schedule C business before the (generally) 20% QBI percentage is applied.

 

If you don't have another QBI business with income (e.g., another Schedule C, a Schedule K-1, or a Schedule E rental with income), your $31K loss from the Schedule C business will "carry forward" to future years.  Once the Schedule C business has cumulative QBI (income is more than losses since 2018), or once you QBI from other businesses that is more than the $31K, you will get a QBI deduction.

 

If you don't have other QBI businesses on your tax return, the $52 QBI deduction you see is likely from a Section 199A (REIT) dividend from box 5 of a Form 1099-DIV, or a Schedule K-1 with PTP or REIT dividend income.

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