SECTION 199A PTP INCOME

[brun08]

I HAVE SECTION 199A PTP INCOME ON A K-1 I RECEIVED.  IT IS A NEGATIVE NUMBER.  I DONT KNOW WHAT TYPE OF LOSS THIS IS, I.E. ORDINARY INCOME, ROYALTY INCOME, OTHER INCOME...

[Irene2805]

What box on the K-1 is it reported in?  Treat the number as ordinary income, unless it is specified as something else (royalty, capital gain, etc.)

[brun08]

OKAY.  NEW QUESTION.  ON FORM 1040, SCHEDULE 1 WORKSHEET, THERE IS A QUESTION ABOUT SELF EMPLOYED HEALTH INSURANCE AND LONG TERM INSURANCE.  IS THIS LONG TERM INSURANCE INFO FOR ONLY THE SELF EMPLOYED TAXPAYER?

[DawnC · Accepted solution]

Yes.  The section on Schedule 1 worksheet is for self-employed persons.  If you are not considered self-employed, your insurance premiums are deducted on Schedule A as an itemized deduction.  

One of the following statements must be true to claim the deduction on Schedule 1: 

• You were self-employed and had a net profit for the year reported on Schedule C (Form 1040), Schedule C-EZ (Form 1040), or Schedule F (Form 1040).
• You were a partner with net earnings from self-employment for the year reported on Schedule K-1 (Form 1065), box 14, code A.
• You used one of the optional methods to figure your net earnings from self-employment on Schedule SE.
• You received wages during the tax year from an S corporation in which you were a more-than-2% shareholder. Health insurance premiums paid or reimbursed by the S corporation are shown as wages on Form W-2. 

The insurance plan must be established, or considered to be established as discussed in the following bullets, under your business: 

• For self-employed individuals filing a Schedule C, C-EZ, or F, a policy can be either in the name of the business or in the name of the individual.
• For partners, a policy can be either in the name of the partnership or in the name of the partner. You can either pay the premiums yourself or the partnership can pay them and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the partnership must reimburse you and report the premium amounts on Schedule K-1 (Form 1065) as guaranteed payments to be included in your gross income. Otherwise, the insurance plan won’t be considered to be established under your business.
• For more-than-2% shareholders, a policy can be either in the name of the S corporation or in the name of the shareholder. You can either pay the premiums yourself or the S corporation can pay them and report the premium amounts on Form W-2 as wages to be included in your gross income. However, if the policy is in your name and you pay the premiums yourself, the S corporation must reimburse you and report the premium amounts on Form W-2 in box 1 as wages to be included in your gross income. Otherwise, the insurance plan won’t be considered to be established under your business.

[brun08]

Many thanks! Awesome!

[Anonymous]

it is none of the above. a 199A loss on a PTP goes nowhere unless you dispose of your partnership interest

them it is used as a component in computing the QBI deduction. PTP income is not QBI just a component for the computation. if the PTP 199A loss is allowed, it is first used to offset any 199A REIT dividends.  if there is an excess loss, that loss is carried over to 2020

example  qualified reit dividend  $5,000

                allowed PTP loss              (1,000)

net                                                      $4,000

qbi deduction $800 (20%)

same except PTP loss $6,000 

no qbi deduction. ptp carryover loss $1000

it's entered in box 20 code Z.  then you must use the link to detail this info in section D1 of the k-1.   

right now TT has a software bug in computing the proper allowed loss for PTP's 

[LMCA]

very helpful, thank you!

[whitedalene]

Has this bug been fixed?  I can't get it to work.