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QBI and effectively connected income

Situation:  US citizen living abroad, providing consulting services to a non-US organization that has no physical or organizational ties to the US, and the citizen has no physical office in the US.  The citizen is a self-employed single proprietor utilizing Sch C.  This individual is paid by the organization in US dollars to a US bank.  Work product is primarily accomplished working from home while overseas but a bit is done during visits to the US.  Is there any way the individual's income could considered effectively connected income in order to utilize the QBI deduction?

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3 Replies

QBI and effectively connected income

I will page Champ @pk. Stand by.

QBI and effectively connected income

Hello, I was wondering if there was any reply?  Thank you!

InibeheA
Expert Alumni

QBI and effectively connected income

No, the income is not considered effectively connected income in order to utilize the Qualified Income Business (QBI) deduction. QBI excludes income that is not effectively connected with the conduct of business within the United States. 

The individual worked for a foreign entity that did not conduct business in the US.

 

 For more information please see Qualified Business Income Deduction

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