QBI Passive Op Loss Must be entered

[MANDKIM]

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. 

[DianeW777]

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.

[paulhart]

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

[James16]

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.

[DSOVa]

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

[paulhart]

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.

[MANDKIM]

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.

[paulhart]

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. 

[jstuewe]

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.

[Arem1]

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.

[paulhart]

Yes, it's a bug and they should fix it. The only workaround is to find the number for the 2019 QBI Passive Op Loss in your 2019 return and enter it manually. It's on the same form in Schedule E, so go to the Forms View and search. It's not hard to find, but that just makes it more annoying to have to find it yourself.

If your 2019 Total Loss was not limited (usually the case), then the 2019 QBI Passive Op Loss is the same as the 2019 Total Loss (which, strangely, TurboTax does provide for the 2020 return). If you just want to get around the error message, you can just enter that number in (it's for carrying past losses forward and will not affect the tax you pay until you deplete the loss against profits). If the loss was limited in 2019, the IRS will change the number and ask if you agree. Thank them for finding the error and blame it on TurboTax.

[gmangesh]

Brilliant. This saved me from some serious hair-pulling. I too see the the 2019 "Regular Tax" number is entered in the "2018 QBI" column. When I enter this number in the Smart Check screen, TT moves the number from the "2018 QBI" row to the "2019 QBI" row.

Does appear to be a bug. 

[jackinthebox]

Can you please specify exact form/field to copy from ? I can't seem to find any field with exact same name 'QBI Passive Op Loss' in my 2019 forms ?

I had my losses limited (due to phase out).

[gmangesh]

I did not look for it in the 2019 returns - instead I went into Forms View in TT while filling out the 2020 returns. I looked at the relevant Schedule E (in my case, it was a Schedule E). It has a section for QBI loss carryovers. TT is  erroneously putting the 2019 QBI value into the 2018 row.

[ajay1900]

hmm....

I am following the same way, hopefully, it's correct.

but it's weird that those experts above kept saying rental property might not qualify QBI.... I don't totally understand there though.