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azpima78
New Member

Have to enter 2 K-1's for royalties and rental real estate income but only royalities K-1 calculates the QBI deduction. Why? K-1 from LLC has both on 1 K-1

Since LLP is one pass-thru business why doesn't QBI deduction apply to both K-1's in TT?  TT does the deduction for the royalties but not for the rental income.  Have to do 2 K-1's in TT to enter both incomes

1 Reply
JulieR
New Member

Have to enter 2 K-1's for royalties and rental real estate income but only royalities K-1 calculates the QBI deduction. Why? K-1 from LLC has both on 1 K-1

In order for the Qualified Business Income Deduction (QBI) to be calculated, the K-1 Form must contain certain codes pertaining to "qualified business income". 

The "qualified" income for the QBI deduction is reported on your K-1 in Box 20 code "Z to AD" for Section 199A income if it is related to a Form 1065 (Partnership).  

If related to a Form 1120-S (S-Corp), it will be reported in Box 17 code "V,W,X,Y and/or Z". 

After you have entered all of the information from your K-1, you will need to answer a couple of questions regarding the nature of the income and your expected income.  If you meet the qualifications, the QBI deduction calculates after that. 

Please comment if you need additional clarification.

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