topic QBI Carryforward Loss in Business & farm

QBI Carryforward Loss

tidubaga — Tue, 10 Feb 2026 09:02:29 GMT

Hi.

I have around $2900 that has been showing as "Qualified business net (loss) carryforward from the prior year" on the last 2 returns. I now make a salary and interest income only.

Can I deduct / offset this if I have no QBI this year (only W-2 wages and Interest income)?

Thanks.

Re: QBI Carryforward Loss

ThomasM125 — Wed, 31 Jan 2024 03:49:45 GMT

No, the qualified business income deduction (QBI) only applies to business income. If you have a business loss one or more years, you may have a QBI loss carryforward that can only be used to offset business income in future years. If your business income is more that your QBI loss carryforward, then you may qualify for a QBI deduction in that year. Since you don't have any business income anymore, you can't use the loss against it.

Re: QBI Carryforward Loss

Mike9241 — Wed, 31 Jan 2024 04:37:58 GMT

this is a forever carryover unless the law changes. if 10 years down the line you have QBI income then some or all of your QBI loss will be used.

Re: QBI Carryforward Loss

hawapani123 — Wed, 02 Apr 2025 02:45:39 GMT

This is interesting. I had the same scenario where I had $3500 carry over business loss from 2023 In year 2024, I had a income of $2000, based on what you wrote, I can't offset this $2000 income from carryover loss since it is still less than $3,500 carry over loss. Is that correct? This is the way Turbo tax is treating as well. So I am still end up paying tax on $2000 income even though I have a carry over loss. It really doesn't make any sense to me.

Am I missing something? I was expecting that it should at least offset my $2000 income with carry over loss and then leave my carry over loss to $1500 for next year.

Re: QBI Carryforward Loss

MonikaK1 — Wed, 02 Apr 2025 18:09:05 GMT

It depends. Did you review all of the forms and worksheets that TurboTax prepared from your entries, such as Form 8995 / Form 8995-A? Did you transfer your 2023 information to your 2024 return?

If you have a K-1 carryover loss and don't have 2023 information in your 2024 return, you can manually enter the QBI carryover. See this help article for steps.

From this IRS FAQ page:

A taxpayer must net their QBI, including losses, from multiple trades or businesses (including aggregated trades or businesses). So, qualified business losses from one business will offset QBI from other trades or businesses (including aggregated trades or businesses) in proportion to the net income of the trades or businesses with QBI.

If the total QBI from all trades or businesses is less than zero, the taxpayer's QBI Component will be zero and any negative amount is carried forward to the next taxable year.

The carried forward negative QBI will be treated as negative QBI from a separate trade or business for purpose of determining the QBI Component in the next taxable year.

Any negative QBI carried into the subsequent tax year as a qualified business net loss carryforward will be used in that subsequent year to determine the net qualified business income or loss in that year. If the net loss carryforward from the originating year is not fully absorbed in the subsequent year, the new net loss amount will become a qualified business net loss carryforward to be applied in the subsequent year.

@hawapani123

Re: QBI Carryforward Loss

hawapani123 — Sun, 06 Apr 2025 00:22:51 GMT

Thanks for the explaination. One more thing, this QBI loss doesn't offset any W2 income, correct?

Also, If I have schedule C loss, Is that also reduces W2 income or not?

Thanks

Re: QBI Carryforward Loss

MonikaK1 — Sun, 06 Apr 2025 01:06:49 GMT

The Qualified Business Income deduction appears on Line 13 of Form 1040, so it serves as a deduction from your Adjusted Gross Income in arriving at your overall Taxable Income.

A profit or loss on Schedule C appears on Schedule 1, which flows to Line 8 of Form 1040, so it is part of your overall Adjusted Gross Income along with your wages.

@hawapani123

Re: QBI Carryforward Loss

hawapani123 — Sun, 06 Apr 2025 21:12:06 GMT

It looks like it is driven by form 8995 (refer screen shot below) , which making this deduction zero which is not making sense to me, Can u help in clarifying this?

Re: QBI Carryforward Loss

DianeW777 — Mon, 07 Apr 2025 19:10:24 GMT

Yes, first it will go to Form 8995 and if there is any allowable qualified business income deduction (QBID) it will carry to your 1040, Line 13 as indicated by our amazing Tax Expert @MonikaK1. When you enter the information TurboTax will automatically do the calculations.

Wages are not part of qualified business income however the taxable income is factored in to see what the allowed QBID might be. It is a 'lesser than' calculation. You cannot use that loss against personal income. You can carry it forward to offset any future qualified business income (QBI) for a business or investment K-1 profit or positive qualified business income (QBI).

To include your QBID carryforward loss so that it is not lost you can use the steps below.

TurboTax Desktop or TurboTax Online
- Business Income and Expenses > Less Common Business Situations > Net Operating Loss/QBI Carryforward Loss

@hawapani123

Re: QBI Carryforward Loss

number1pad — Sat, 21 Feb 2026 19:33:04 GMT

So I have the same issue with QBI loss carryover from a rental property, but I think there is a bug in the TurboTax software that may have resulted in me having higher tax liability in 2024 than I should have, and for 2025 the software is preventing my attempts to correct this, despite my best efforts.

For 2023 the following shows on my Form 8995

In 2024, I actually had net income from the rental property, yet the software created the following, and my tax liability was not reduced to zero for the rental property income.

I was confused at the time, but did not put in the effort to attempt to rectify this. As you can see above, my carryforward loss decreased by the net income amount, but that is not what ultimately showed on my 1040, as you can see below.

Now, attempting to do my 2025 return, again with net rental property income ($2,346), It is not allowing me to manually enter any number from the Form 8995 without giving me an error.

First question, shouldn't my Schedule E suspended loss carryover actually be $77,361 since that is what I had after filing my 2023 return and none was applied to my 2024 net income?

Second question, if this is in fact an error of the software, as I attempt point out above, I could amend my 2024 return and get more back, then use the $69,564 figure for 2025, but that seems like too much work and a potential for triggering an audit. I would like to simply apply some of the $77,361 carryover from 2023 to 2025 and then carryover the remainder, but I don't see a way for the software to allow me to do that.

Please assist.

Re: QBI Carryforward Loss

ThomasM125 — Tue, 24 Feb 2026 21:11:04 GMT

No, a QBI loss is not deductible against taxable income.

In 2024 you had a QBI loss carryover from 2023 of $77,361, but you had QBI and apparently rental income in 2024 of $7,797, so the carryover QBI loss to 2025 would be the difference. In 2024 you had net rental income of $7,797 that may have been taxable. But you can't use your QBI loss carryover to reduce it.

The QBI loss can come from other sources besides your rental activity. If your only source of QBI is from the rental activity, then the rental loss carryover and QBI loss carryover may be the same, but often they are different. The important thing to keep in mind though is that a QBI loss is only used to determine your QBI income, it is not deducted from your taxable income. The QBI income is tracked since you use it to determine your QBI deduction when it is a positive amount.

Re: QBI Carryforward Loss

AmeliesUncle — Tue, 24 Feb 2026 22:42:29 GMT

@number1pad wrote:

DON'T be manually entering that amount on that line. That is Passive Loss Carryovers, not QBI carryovers. They are very, very, very different.