QBI Deduction
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GDinNC
Returning Member

QBI Deduction

My K-1 income is not transferring to Form 8995 even though I checked the qualified business box. Help please.

5 Replies
JamesG1
Expert Alumni

QBI Deduction

Do you know what kind of K-1 you are using?  There are three different kinds of K-1’s that can be entered into TurboTax software. 

  • Partnerships/LLCs (form 1065)
  • S corporations (form 1120S)
  • Estates and trusts (form 1040) 

You should be able to read the top of the form and determine which K-1 that you will be entering. 

 

I think that you are asking about S corporations (form 1120S).  If so, in TurboTax Online, follow these directions. 

  • Down the left side of the screen, click on Federal.
  • Across the top of the screen, click on Wages & Income.
  • Under Your income, scroll down to Schedule K-1 and click Edit/Add to the right.
  • At the screen Tell us about your Schedule K-1, you tell the software which Schedule K-1 you received.
  • For several screens, you will be entering data right off the K-1 form. 

K-1 1120S box 17 information is entered under code V.  If the K-1 has no dollar amount, the Section 199A income should be on an attached statement.

 

At the screen We see you have Section 199A income I suspect that you will choose The income comes from the S corporation that generated this K-1.

 

At the screen We need some information about your 199A income, you will likely enter: 

  • an income line,
  • a W-2 wage line and
  • a UBIA of qualified property line. 

Hopefully this information is on an attached statement if the information is not listed on the K-1 itself.

 

You will to reach the screen Great news!  You get a tax break if you qualify for a qualified business income deduction.

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GDinNC
Returning Member

QBI Deduction

I have K-1 from an LLC that is taxed as a partnership.  .The income is rental income

ToddL99
Employee Tax Expert

QBI Deduction

Rental properties are usually treated as passive activities, and passive activities are excluded from the definition of a qualified trade or business - unless this activity qualifies as a trade or business for you, you won't get the QBI deduction.

 

Qualified business income, or QBI, is the net income generated by any qualified trade or business under Internal Revenue Code (IRC) § 162.

 

Rental properties are usually treated as passive activities, and passive activities are excluded from the definition of a qualified trade or business. However, rentals that qualify as trades or businesses under IRC § 162 are not considered passive, which means they could potentially qualify for the QBI deduction.

 

Can I get the QBI deduction on rental income?

GDinNC
Returning Member

QBI Deduction

I am a real estate professional, so I believe the LLC will qualify for a trade or business.  I marked box 20 and Turbo Tax accepted the entry.

MaryM428
Level 6

QBI Deduction

If you’re a real estate professional for tax purposes (that is, over 50% of the personal services you performed in business during the tax year were in a real estate business you materially participated in for more than 750 hours that same year) then your rental income qualifies for the QBI deduction, provided all the other conditions are met.
 

Can I get the QBI on rental income?

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