Qualified Business Income Deduction Carryforward

[usernamesarehard]

I have a qualified business net loss carry forward from prior years of 137000. I am also a real estate professional. However I owe 7500 and none of my net loss carried forward is being applied against my income consisting of 100000 in real estate investment and 20000 in rental income. Shouldn't my adjusted gross income be zero? What am I missing? This is for 2022.

[Anonymous_]

First of all, make sure you actually have an NOL.

See https://www.irs.gov/publications/p536#en_US_2021_publink1000177329

Next, if you are using TurboTax (which I have to presume), you need to manually enter the NOL into the program. TurboTax does not automatically carry forward an NOL from one tax year to the next.

[Mike9241 · Accepted solution]

QBI loss carryforward is not a net operating loss carryforward. what happens is the $100K +20K, if both are net QBI income, is that QBI is reduced to $0 so you get no QBI deduction. at best the QBI deduction against taxable income is 20% of net QBI income. look at form 8995. the deduction, if any, shows up on line13 of the 1040

[usernamesarehard]

so after researching a little bit I am assuming this has to be positive or zero so for it to benefit me? the 137000 just stops me from being able to claim a qbi deduction correct?

[Mike9241]

it's a lot more complicated because you can have QBI income and still not get a QBI deduction 

if your taxable income is too high there's a phase-out and there are other rules if the business income is from a specified service trade or business. 

see form 8995-A.