I am getting an error message saying QBI passive Op loss must be entered for 2019 Does entering a zero in the 2019 QBI operating loss result in no carry over?

[ThomasM125]

Yes, that would mean you wouldn't have a carryover QBI amount.

[bernardr123]

I am getting that same message during smart check. The only value it will accept is 0. Does that impact next year's taxes? Why is Turbotax not generating the right number but instead shows it as an error during smart check and does not let you input any other number than 0? Is this a bug? How do I deal with this?

[JamesG1]

You should be able to enter a number other than zero.  

In TurboTax Desktop Home & Business, I am able to enter a QBI loss carryforward.  I can enter a positive or negative number, and passes Review.

Has your software version been updated?

I followed these steps:

• Click on Business / Click Continue / Click I'll choose what I want to work on. 
• Scroll down to Net operating loss/QBI carryforward loss / Click Update.

In Forms view I am able to view the entry on IRS Form 8995 Qualified Business Income Deduction.

See this TurboTax Help.

[jdrelick]

I am getting the same error message - that I must enter a QBI Passive Op Loss on my Schedule E worksheet for my rental property.  I see a number populated for 2018 - why is it blank and generating an error message for 2019?  More importantly, how do i fix this?  I am getting it for 5 rental properties that all have the same message.

[eming83]

I am having the same problem with Premier has anyone found a workaround? Is TurboTax working on it. Who else thinks that the free basic getting all the live help they want and those of us who buy the upgrades do not is BS?

[DianeW777]

It depends.  This will specifically address the qualified business income deduction (QBID), and the carryover loss of the same, for real estate rental activates.

If you do not meet the requirements for your rental activity to be classified as a trade or business according to IRS, then you would have a zero carryover loss for the QBID.

In your 2019 TurboTax file look for any worksheets labeled Carryover (8995 worksheets specifically).

The IRS finalized the safe harbor rules for rental properties.

This safe harbor is available for taxpayers who seek to claim the section 199A deduction with respect to a "rental real estate enterprise." Solely for purposes of this safe harbor, a rental real estate enterprise is defined as an interest in real property held to generate rental or lease income. It may consist of an interest in a single property or interests in multiple properties. The taxpayer or a relevant passthrough entity (RPE) relying on this revenue procedure must hold each interest directly or through an entity disregarded as an entity separate from its owner, such as a limited liability company with a single member.

The following requirements must be met by taxpayers or RPEs to qualify for this safe harbor:

1. Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise.
2. For rental real estate enterprises that have been in existence less than four years, 250 or more hours of rental services are performed per year. For other rental real estate enterprises, 250 or more hours of rental services are performed in at least three of the past five years.
3. The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: hours of all services performed; description of all services performed; dates on which such services were performed; and who performed the services.
4. The taxpayer or RPE attaches a statement to the return filed for the tax year(s) the safe harbor is relied upon.

@jdrelick 

[Edited: 03/21/2021 | 12:25p PST]

[ZeroRing]

I'm still not clear on why I need to manually enter this "QBI Passive Op Loss" number?  Say I had a -$5,000 loss in 2019 but then in 2020 I had income of $2,300... which doesn't erase my carry forward loss from 2019.  Does this mean I would enter -$2,700 as my "loss" for 2020?  Is this the QBI Passive Op Loss for 2020?

If so, why doesn't TurboTax already do this math?

[DianeW777]

Let's try to sort this out. There are two different carryover losses being addressed in your question.

1. Passive Activity Losses (PALs) from your residential rental property
2. Qualified Business Income (QBI) loss from 2019 if your rental property qualified for this deduction. 
   • Review the information above to see if your rental activity meets the qualifiers for QBI deduction

You may have to enter these amounts into your 2020 tax return.

You can use the passive activity loss (PAL) carryover amount from the worksheet 5 or 6, Form 8582, 2019 tax return shown as unallowed loss. The alternative minimum carryovers may be the same if your assets are using the 27.5 year depreciation method (most common).  Look for a similar Form 8562 with "Alt Min Tax" under the main title

• Use the Search (upper right) > Type rentals > Select Edit beside your Rental Activity  > Under Less Common Business Situations > Edit Carryovers, limitations, at risk info, etc. > Continue to enter your passive loss carryover.

The qualified business income (QBI) carryover is entered under your rental activity as well.

• Under Income and Expenses > Other Business Situations > Net Operating Loss/QBI Carryforward Loss

TurboTax does carryover most of prior year data and apply it to your return, occasionally you need to enter certain data from the prior year.  Any loss that is unallowed in 2020 will be shown on the same form (8582).

Phaseout Rule: The maximum special allowance of $25,000 ($12,500 for married individuals filing separate returns and living apart at all times during the year) is reduced by 50% of the amount of your modified adjusted gross income that’s more than $100,000 ($50,000 if you’re married filing separately). If your modified adjusted gross income is $150,000 or more ($75,000 or more if you’re married filing separately), you generally can’t use the special allowance. This is because the special allowance is reduced to $0 since the modified adjusted gross income is over the $100,000 amount.

[ZeroRing]

In my case the business income isn't on a rental property it's on a small community well that I own and operate.  In 2019 I had the pump fail and the replacement cost was nearly triple the annual income the well brings in so my 2019 return showed the significant loss with approx two-thirds remaining which I assumed would be carried over to my 2020 return?

When doing my 2020 taxes in Turbo Tax it pulled the loss from 2019 and when "adding" that loss to the meager income for 2020 I still have about one-third of the original "loss" remaining which I'd assumed would be carried over to my 2021 return?  I don't recall seeing QBI mentioned in my 2019 return so I'm uncertain what value to manually enter to clear the error in my 2020 return?

[DianeW777]

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.

[EliC]

This one is getting me too.

My 2018 loss was calculated and carried forward.

If I go to my 2019 form 8582 and enter my "unallowed loss" it for some reason adjust my 2018 number

Am I supposed to enter my allowed loss of ZERO?

[DianeW777]

The 2019 return should show the combined losses carried forward.  In other words the 2019 QBI loss component should have both year's included if there was an overall loss in 2018 as well as 2019.  There may be confusion where 2018 may be displayed for the 2019 amount (this may have been corrected, I am unable to see this for the prior year).

As I indicated earlier, you should find it on Form 8995 or 8995-A in your 2019 tax return.  Use the QBI Deduction Summary page from your prior year (2019) return.

@EliC

[47acre94]

@DianeW777 , 

I'm experiencing something similar to @EliC . When doing the federal review, TurboTax found a missing QBI Passive Op Loss, which it is identifying as the 2019 entry in the table at the very end of the TT K-1 Form. It appears this number should normally be the "Regular Tax" loss as reported in the same table in the column to the left of the QBI numbers. 

In my case, my regular tax losses for 2018 (row D), 2019 (row G), and 2020 (row J) are -9131, -4287, and -2470, respectively. TT has set my QBI value for 2020 (again, row J but the right column), to match the Regular Tax column = -2470 and is asking for me to input the 2019 (row G) number. As I enter a number here, it calculates the QBI value on row D for 2018. If I enter -4287 for row G QBI, it calculates 0 for row D QBI.  

In the advice you gave to EliC, I understood that I should add the regular tax losses for 2018 and 2019, which for me would be -13,418. If I enter this on row G for 2019 QBI, it calculates POSITIVE 9131 for row D QBI. Is this what you are saying should be done?