Why am I being asked for a QBI Aggregation Statement when I indicated individual QBI?

[Matt18]

I have a rental and business (self employed)  QBI. I indicated that both are "individual", not associated with another business. Yet, TurboTax is asking me for aggregation statement.  Why?  How can I fix this?

If this is correct, what do I put for the aggregation statement?

[RobertB4444]

If your businesses are substantially connected then they can be joined together in order to calculate your QBI deduction.  In some cases this can result in a higher QBI deduction and it also reduces the amount of paperwork involved.  

Here is a good article on QBI aggregation.  Just note that if you do choose to join the two businesses together for QBI purposes then you have to keep them that way.

@Matt18 

[Matt18]

Thanks, @RobertB4444.   The only thing the two businesses have in common is me. One is a rental property and the other is my self-employment contract work.  Does that qualify?  If not, how do I separate them in TurboTax?  I already indicated "This business is independent of any other activities."

If I can't/shouldn't separate them in TT, what should I put for the "Aggregation Statement?"

[RobertB4444]

The aggregation idea says that the businesses are substantially linked.  If you are a real estate professional and then also renting a house then they are substantially linked.  If you are not a real estate professional, then they should not be aggregated.

If you are aggregating, then the statement consists of a description of each trade or business and the name and EIN of each trade or business.  

@Matt18 

[Matt18]

Thanks @RobertB4444 .  Yes, they are not linked.  So how do I deaggregate them in TurboTax?

There's a page where TT asks me if the business is associated with any other and I say "no" (actually, "no" is the only option), see below:

[KrisD15]

The screen you are showing us is doing what you want, NOT aggregating the rental with your Self-Employment. 

The screen is INFORMATIONAL only. 

That screen could be relevant if you have another business or rental, but if you don't, you're good. 

Your return IS NOT including a statement to aggregate.

@Matt18 

[Matt18]

Thanks, @KrisD15 . Yes, the screen is saying what I want, but TurboTax is actually aggregating on the 8995-A form. There is only one column for both business and the aggregation checkbox is checked. How do I get TurboTax to stop aggregating?

Last year, TurboTax did not aggregate. There are two columns.

[KrisD15]

Are you sure 2021 Form 8995-A does not have the aggregation box checked?

Did your business and the rental BOTH make a profit? 

I suggest you go through the interview for both your business and the rental. 

Delete the 8995-A and close the program. 

The program should again ask about aggregating when you return to the program. 

Pease let us know if this takes care of the problem. 

To Delete a Form in Desktop:
Simply switch to FORMS (top right corner) 
Find the form you want
Select DELETE located at the bottom of the screen 
Confirm

To Delete a Form in Online:
Click TAX TOOLS on the left side-bar
Click TOOLS on the Drop-Down 
Click “Delete a Form” on the TOOLS CENTER screen 
Click Delete next to the form on the list 
Confirm and continue 
 

[Matt18 · Accepted solution]

Thanks, @KrisD15 .  I tried deleting the 8995A form, but it would immediately add it back after deleting it.  I eventually figured out how to fix it by removing the QBI for one of the businesses and then adding it back. When I added it back, TT asks if I want to aggregate this business with the other one. I say no and that fixed form 8995A.

[Justin202203]

@Matt18 

Thank you very much. You helped for my issue too.

Have a nice evening.

[quickvale]

Hello @RobertB4444 ,

I aggregate my 2 rentals for QBI purposes only (not for purposes of IRC section 469(c)(7)(A) ). I know that once we aggregate properties for QBI purposes they should remain aggregated, however, I sold one of the rentals.

I'm reporting my sale in my tax return but I am wondering if I need t do anything special regarding the QBI deduction as now it will only be one property. Not sure if I need to write a statement indicating there is no more aggregation for QBI purposes because I sold the property.

Thoughts?

Thank you!

[RobertB4444]

I am assuming that you are a real estate professional because otherwise I don't see how you can possibly qualify for a QBI deduction with only one rental property.

As a real estate professional you do not have to submit any new documentation to remove or add a rental property other than entering it onto your tax return.

@quickvale 

[quickvale]

Thank you @RobertB4444 .

In my question I was just using 2 rentals for the question purposes but I do have other rentals. I just wasn't sure how to remove one property from the QBI aggregation but after reading the US Code and regulation I found out I don't need to aggregate for QBI purposes as you only need 250 hours across all properties to meet the hourly criteria to get the QBI deduction.

Thank you for your time to answer.