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4dartist
New Member

Do I use a neg or pos number to indicate loss when the line is asking for loss? "Rental income (loss)" Pos number nets me more refund :/

I'm entering data for Schedule K-1, in field 20 I have an N and Z code.  Turbotax is asking me about it.   Code Z is called Section 199A.   Turbotax is asking, "We need some information about your 199A income".   I checked that my business has income (loss) and then specifically there is a line for Rental income (loss) with a box after it.   Do I put a positive number in here considering this number is already designated a (loss) or should I put a negative number here?   When I put a negative number, I end up owing more money, so it kind of confused me.
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ThomasM125
Employee Tax Expert

Do I use a neg or pos number to indicate loss when the line is asking for loss? "Rental income (loss)" Pos number nets me more refund :/

The code Z entry in box 20 is for the qualified business income deduction (QBI). It should be the same sign as the number to which it pertains, which is the income reported in box 1 to 3 on your form 1065 k-1 schedule.

 

Code "N" would be a positive number, as it represent interest expense.

 

When you entered a negative number for code Z, it reduced your QBI, so that is why your tax went up.

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JeffreyR77
Expert Alumni

Do I use a neg or pos number to indicate loss when the line is asking for loss? "Rental income (loss)" Pos number nets me more refund :/

When prompted for a loss, in most cases you would enter a positive number.  Your description supports this conclusion.  Putting in a negative is being added back in effect reducing your loss and causing you to owe more money.  Enter as a positive number.

4dartist
New Member

Do I use a neg or pos number to indicate loss when the line is asking for loss? "Rental income (loss)" Pos number nets me more refund :/

If it's supposed to be entered as a positive number then I'm a bit disappointed in the clarity and constancy of Turbo Tax on this.  When doing taxes it should be pretty dang clear on if you are putting in a loss/gain.   This is probably the only part of my taxes I'm not sure about and I really don't want to have to call a CPA for it.  :/.   I think the Section 199A Code Z on a Schedule K-1 has to do with a deduction the business is taking.  I'm just not sure if it is meant to space that loss out over tax years, so maybe that's why putting in the loss as a neg number gave me less of a return; because it's pushing the loss forward to 2021 tax year?  I'm not sure..  I guess I need to dig deeper.

ThomasM125
Employee Tax Expert

Do I use a neg or pos number to indicate loss when the line is asking for loss? "Rental income (loss)" Pos number nets me more refund :/

The code Z entry in box 20 is for the qualified business income deduction (QBI). It should be the same sign as the number to which it pertains, which is the income reported in box 1 to 3 on your form 1065 k-1 schedule.

 

Code "N" would be a positive number, as it represent interest expense.

 

When you entered a negative number for code Z, it reduced your QBI, so that is why your tax went up.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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