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Anonymous
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QBI Deduction of 20% and passive loss from rental property

Hello Dear Community - I have a rental house. It has a passive loss for 2023. In TT - it tells me that I qualify for a QBI deduction of 20%. Question: how can I have a deduction if 1) it is a loss and 2) will this deduction carry over to the future when I have passive income? Appreciate it. 

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5 Replies
DawnC
Employee Tax Expert

QBI Deduction of 20% and passive loss from rental property

Is there a QBI deduction amount on your Form 1040?   It would be on Line 13.   

 

If you have a passive loss on your return (Form 8582), yes, it will carry over until you have passive income to offset it.  

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Anonymous
Not applicable

QBI Deduction of 20% and passive loss from rental property

Thank you. I have not generated 1040 yet. I am still in the process of going through the TT steps, but I will check.

 

Could you please explain to me how deduction can be for passive loss? Say a loss is ($5,500) then a deduction should be $0.

QBI Deduction of 20% and passive loss from rental property

actually you have QBI loss carryover 

 

a somewhat oversimplified example

say you lost $10K from the rental in 2023. the QBI loss carryover is the $10K

in 2024 you have $11K of income from the rental 

the 2023 QBI loss carryover offsets the 2024 QBI income leaving you with a net of $1K for which you get a 20% deduction of $200  

Anonymous
Not applicable

QBI Deduction of 20% and passive loss from rental property

Thank you - what forms should come to 1040 for QBI deduction, and where would it be on TT Desktop to check besides the return preview?

PatriciaV
Employee Tax Expert

QBI Deduction of 20% and passive loss from rental property

The Qualified Business Income Deduction (QBI) is calculated on Form 8995 and included with your filed tax return.

 

In TurboTax Desktop, click the Forms icon in the header. Look for Form 8995 in the left column then click the form name to open it in the larger window. Under Form 8995, there will be individual QBI Component Worksheets, one for each source of QBI. These TurboTax worksheets are not sent the IRS.

 

@Anonymous 

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