You will enter the loss sustained in 2019 as your qualified business income (QBI) carryover loss in the 2020 tax return. Although TurboTax carried it for the passive activity, it may not have entered it as your QBI carryover. The full loss on the Schedule E for 2019 should be entered as your QBI carryover loss if that was the only income on your tax return that was considered QBI.
Each type of QBI is used to determine your full QBI deduction. Any overall losses sustained, that was part of QBI, are carried over to following year to offset any potential positive income in the new year to determine the allowed QBI for the new tax year.
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