Schedule K-1 Box 14

[mkjarvis4]

My 2 siblings and I have a Family Trust.  The only thing in the trust is real estate.  We are renting out a building on the property and that is the only income for the trust.  I have generated the Schedule K's and in Box 14 it shows I* (the letter) and then STMT.  Apparently there should be some kind "attached statement with additional information".  I don't know what information they want.  There is a figure in box 7 (Net rental real estate income), Box 9 A and Box 12.  Any suggestions? 

Thank you!

Mary

[jtax]

Box 14 Code I is where you tell the beneficiaries how much of the income generated is from a trade or business that qualifies for the new (2017) pass-through deduction for "Qualified Business Income" (QBI)
(also known as the section 199A deduction). The benes might be able to deduct 20% of QBI on their 1040s. See page 3 of https://www.irs.gov/pub/irs-pdf/i1041sk1.pdf

It is very complicated and its application to rental properties is even more so because it is often not clear that a rental activity is a trade or business. (E.g. it is more like an investment.) So there is a complicated set of "safe harbor" rules that, if you follow them, means you are sure you qualify.

So if the income distributed is small you might just ignore it. Otherwise here are some starting points. You might seriously consider seeking guidance from a CPA, enrolled agent, or tax attorney. For an hour or two of their time they can look at your facts and tell you how to proceed.

https://www.picpa.org/articles/cpa-now-blog/cpa-now/2019/12/31/rental-property-and-section-199a-tax-...

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

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[tagteam · Accepted solution]

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You can enter Forms Mode (click the forms icon in the upper right side of the screen) and look at Forms in My Return on the left side of the screen. You should see an entry directly below each of your K-1s designated as Statement A.

[mkjarvis4]

Thank you!