How can I carryover QBI losses into next year?

[a_sal6]

My QBI loss (on rental properties) wasn't deductible this year. How can I carryover losses into the following years and be able to deduct those losses from my income?

[ThomasM125]

You are required to carry your qualified business income (QBI) loss forward to next next year, but it would not serve as a deduction from your taxable income. The QBI is what you use to calculate your QBI deduction, which can be as much as 20% of your QBI income. So, you have to have qualified business income to generate a tax deduction. You do carry the QBI loss forward to next year, but it is only used to reduce your business income and therefor, your potential QBI deduction. 

You can carry an unused passive loss from your rental property forward and that will benefit you by reducing your rental income in the next year. TurboTax will do that automatically for you. If you didn't use TurboTax in the previous year but have a rental loss carryforward, you will see an option to enter that amount when you work through the rental income and expenses section in TurboTax. But that is different from a QBI loss.

[a_sal6]

Ah, that clears it! I don't have any rental income, yet. But hopefully in the future when interest payment go down, I can use my carryover QBI losses to offset my rental income in a few years. 

[a_sal6]

.. So that you for the clarification!

[RC_and_C]

I have two business, one of them has a QBI loss, how do I carryover the QBI loss for a future year?  I don't see any option.  Currently, it is reducing the total QBI income and hence reducing the amount of my deduction.  I'm using TT Deluxe Desktop.

[AliciaP1]

All QBI income or loss for the year is considered before it can be carried forward.  If your net QBI from all business results in a deduction (so net QBI income) there is no carry forward.  You cannot elect to treat QBI from different businesses separately.

@RC_and_C 

[RC_and_C]

Thank you for the reply.

So, if I understand correctly, the QBI for both business must be treated as a whole.  Then, if that sum is negative, then at that point, the option to carry forward the negative QBI becomes available.  Correct?

Also, this may sound like a silly question, but if one of the two business has a negative income (loss), is there an option to NOT include it in the QBI calculations?  Since, the whole point of QBI is to have a deduction?

@AliciaP1 

[AliciaP1]

Yes, you are correct in understanding that if the sum of both business incomes is negative then the net QBI is a loss and is eligible to be carried forward.

No, you cannot exclude QBI income on the basis that it reduces your deduction.  You would have to exclude the entire business, which would mean both you were not reporting your income accurately and it would increase your taxable income while your QBI deduction stayed the same.  So, in the end, you could get in trouble and you would pay more tax.

@RC_and_C 

[RC_and_C]

Thank you so much for the help and clarification!

@AliciaP1