QBI Passive Op Loss Must be entered

QBI is only for trades or businesses.  rental property is an issue as to whether its a trade or business or not. realistically, I would find it hard to see a property that is a vacation rental as rising to the level of a trade or business. if you agree that it's not a trade or business enter 0 for QBI.  taking a position it is not would likely carry forward to future years.  if you treat it as a trade or business and in any year there is a cumulative profit (all years as rental) you would be entitled to the QBI deduction but then you have to enter into Turbotax the 2019 net loss as the QBI loss carryforward.  Most likely in  2019 you took the position if was not a trade or business otherwise Turbotax would have carried it forward to 2020        

the IRS has issued revenue procedure 2019-38 for safe harbor election.  those that meet its criteria attach the election to their returns(every year)  and thus they can treat their rental properties as a trade or business without worry that the IRS will say its not.  read section .03 in the link provided.  nothing requires a taxpayer to use the safe harbor but then if they take the position their rentals are a trade or business, the IRS can successfully challenge based on the facts in each case

https://www.irs.gov/pub/irs-drop/rp-19-38.pdf 

Thank you so much, Mike9241! 

That answered my question completely. In reading about whether we are or might be in the future a qualified trade or business, all I saw was the insane amount of record keeping. We're happy without qualifying. I put 0 on the 2019 QBI column that TT was asking for. 

Thanks again, 

Marie 

in my case, I've had my rental property for almost 20 years & I've never had to enter this that I'm aware of!

The form shows amounts for 2018 & 2019 in the Loss & QBI columns - I really don't know what to put!

Yes, I've had a passive loss carryover for years on this property.

How to I figure out what number should be put into this box?

under the Disallowed Passive Losses by Year & Type

Before 2018 - Operating Loss - Regular Tax -14,299 then QBI column is )

2018 Operating Loss is  -1865, then QBI column says -3965

2019 Operating Loss is -2100, then QBI column is blank & wants a number?

How do I calculate this?

Why didn't Turbo Tax do this for me?  It appears that it did it last year for 2018?

I was getting this error as well.  I HAD entered this number manually at the end of entering K-1 info (after noticing it was missing), yet the smart check screen showed that value placed in the 2018 row instead, and the 2019 box was blank (causing the error).  I started my business in 2019 so it was easy to see Turbo Tax was putting my numbers under the wrong year when it showed I had 2018 losses!  I was "lucky" that I knew my 2018 number was 0.  I couldn't delete the 2018 value, but when I again entered the 2019 number in the 2019 box within the smart check screen, the 2018 value disappeared and I didn't get any more errors.  Looks like a Turbotax bug, hopefully fixed before due date!

Thanks !  I can't wait for them to fix the bug!

I guess I'll put the value I believe is correct for 2019 & see what happens.

Anyone know where this value is found on their 2019 tax form?  I'd rather not use the safe harbor as I don't want to paper file a huge return, but I have multiple rentals that combined easily do 250 hours so I am not worried about the challenge.  

I can find where the value for the regular tax calculation is happening on the 2019 form by searching for that value, but I don't know how to calculate the QBI one.  Given I'm getting errors on negative (losses) values, should I assume that the QBI version is the same amount since I'm guessing I don't get a QBI deduction on losses?

If the net overall QBI is less than zero, it is carried forward as a loss from a separate qualified business and will reduce any potential QBI deduction in the following year. Check Form 8995 in your 2019 tax return, and any related worksheets.

Check out Line 10, Form 1040, for 2019.  If that was a positive number there is no carryover.

Thanks for the reply.  Looking at my 2019 return there is a positive number in line 10 of the 1040 so I guess I don't have a carry over.  So for each of those empty fields I just put 0 in them?

You should be able to leave them blank.

The Qualified Business Income deduction (also called the QBI deduction, pass-through deduction, or section 199A deduction) was created by the 2017 Tax Cuts and Jobs Act (TCJA) and is in effect for tax years 2018 through 2025.

With the QBI deduction, most self-employed taxpayers and small business owners can exclude up to 20% of their qualified business income from federal income tax (but not self-employment tax) whether they itemize or not.

The deduction amount depends on the taxpayer's total taxable income, which includes wages, interest, capital gains (etc.) in addition to income generated by the business. Once the taxable income reaches or exceeds $163,300 ($326,600 if filing jointly), the type of business also comes into play.

Use this link for more information  What is a Qualified Business Income Deduction

Thanks for the answer Cynthia, unfortunately it cannot be left blank according to the Smart Check.  It shows the empty box and gives the same error as the original poster "QBI Passive Op Loss Must be entered". 

If no loss, does that mean 0 should be entered so there is a value?

WOW this is EXACTLY my situation. I been using TT for approx 10 yrs and in my Tax Year 2020 return TT auto filled my 2018 QBI but NOT my 2019 QBI and I have been trying for over a week to cross match #s I see in my 2018 return against 2019 to see if I can find my 2019 QBI but guess not necess if I don't want the IRS to audit me declaring my full time rental property as valid for QBI....?

I have the same issue. I've read through the responses above, but I am still not clear what to enter here.  TT does not accept no entry.  If I try to fill in this field with the number in the column just left of it (Regular Tax), $2600, I get an error message "QBI Passive Op Loss should not be greater than the total loss ($1500)". 

How to solve?

Is there a reason TT didn't pre-fill this in?

I also tried making QBI same as passive loss amt and TT no likey that at all :(

And I read here and online other places that the IRS doesn't believe you should use QBI (or very very grey area) for a rental property even if it has been 100% rented for years - it's only one property I have but that's the case for me. One property rented out 100% of the time for 7+ years. Maybe easier just to put "0" QBI for 2019 tax year.

Still unclear WHY TT transf my 2018 tax year QBI info but not my 2019 tax year QBI info. Very confusing. I been using TT for approx 9 or 10 years....

I have the same issue. I called Turbotax last week. They said they had a fix in home and business version. I had Premier version since it is all I need (rental). So I said the fix/patch shall be available for premier version as well. So far I have not seen the fix yet. 

SeanTT, I have Home and Business an I definitely have not seen the fix.  I will call TT to see what answer they give me. 

If this is dealing with rental activities you would have to make the decision as to whether your property qualifies for the qualified business income deduction (not likely unless you meet the following requirements). If you do not meet these requirements you should enter zero for any carryover.

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.

I just updated Home & Business version and as of 3/21/20 9PM, it still is not fixed

I think SRH3's comment above regarding the error in TT is correct.  I have a K-1 that had 2018 and 2019 QBI losses.  TT 2020 comes up with an error saying it is missing the 2019 QBI loss carryover amount.  But when I look at the form it looks like TT is adding the 2018 and 2019 numbers together and putting the total into 2018 and leaving 2019 blank rather than putting 2018 in 2018 and 2019 in 2019.  This is still the case as of 26-Mar-2021, after updating TT Home & Business.  When I manually change the 2019 number to the carryover number from my 2019 return, the 2018 number recalculates to the correct number for 2018.  If you did your 2018 and 2019 taxes using TT Home & Business you should be able to go back and find the 2018 and 2019 QBI carryover numbers.  Putting in the correct 2019 number should adjust the 2018 number to the correct number -- I would check both numbers.  

NOTE:  I am not a CPA or tax professional so I am not attempting to give any tax advice.

I am using Premier and having the same problem in entering information for a limited partnership (business) on Sunday, March 28, 2021.

After pouring through my 2019 return, I eventually found that, in my case, the 2019 QBI Passive Op Loss number was the same as 2019 total loss number TurboTax entered next to the missing number on the 2020 return. In some cases, it might be different, but it wasn't.

Paul,

I also looked in 2019 and found the same. When I tried to enter my 2020 total loss number into the QBI Passive Loss field, I got an error message stating that the number entered was too large. It recommended a lower number, which I may just use. Not sure what else to do here.

You 2020 total loss is not the number they are asking for. The number they want is in your 2019 QBI Passive Op Loss, which is in your 2019 return and is less than or equal to your 2019 total loss, which they enter for you. The largest number they will accept is the 2019 total loss they enter for you. 

I have the same issue.  It's not pulling the 2019 information in correctly from last year and has the "Carry forward to 2020" line from my 2019 tax forms entered in a 2018 column!  We need to get this FIXED!!

Any updates or official response?  It seems like SRH3 and James16 identified the formula error.

I have the same issue as well. The Tax Experts keep quoting the regulations, but the reason we use a software like Turbo Tax is because we don't want to deal with the complexities of the regulation. This is a Turbo Tax bug and they should fix it ASAP instead of quoting regulations, or at least tell us in simple language how to work around this issue.