How is QBI At Risk Op calculated and why doesnt the software do it?

[user17760361635]

I had no idea what that item was referring to or how to calculate it. None of the numbers on the form I was presented with had any relation I could see. 

I payed over $200 for the software to handle things like that for me. Why was this not handled?

[MelindaS1]

This prompt refers to this section (QBI Suspended Losses - Other Provisions) of the Form 8995A Qualified Business Income Deduction instructions :

Tracking Losses or Deductions Suspended by Other Provisions

Caution: A worksheet, QBI Loss Tracking Worksheet (below), is provided that can help you track your suspended losses. Losses and deductions that would be properly includible in QBI, if such loss or deduction wasn’t suspended (excluded from taxable income) by other provisions, must be tracked separately for purposes of determining the future amount includible as negative QBI. Use as many copies of the worksheet as necessary to separately track your suspended loss(es) under each suspending provision.

What this is saying, is that you have to keep your own accounting records for losses which would be includable for QBI purposes, but are excluded only because of other tax rules, such as the at-risk loss limitations or the passive activity loss limitations. Here's the loss tracking worksheet referenced above:

Likewise, the instructions for Schedule C 8995A Line 2 state:

This also includes the QBI portion of losses or deductions suspended from use in calculating taxable income in the year generated that are included in taxable income in the current year. See Determining your QBI, earlier, and QBI Loss Tracking Worksheet, later.

So, in filing Schedule C of the 8995A QBI Deduction, you would enter the Other Provisions suspended losses which are now includable against taxable income, and so also includable for QBI loss netting - to prevent double-dipping: taking too much QBI deduction when you should be offsetting QBI with prior suspended losses. 

If you don't have business losses which are limited by the at-risk rules or passive activity rules or other limitations, just enter 0 here. 

Or, if you don't plan on correcting your at-risk and passive involvement business situations to ever take prior disallowed losses for tax purposes, then you can also enter 0 here. 

Why doesn't the software do this automatically? Because these rules often pertain to real-world business activity and investment situations that can be very detailed in description while also under complex tax rules; you often need to read the fine-print footnotes of partnership and/or  S-corp K-1 income reports to be able to breakout how much of a QBI loss is also a passive activity loss, and compare that information to your own investment basis tracking for that passthrough, to make the determination. The software wouldn't know, for example, if you invested enough money this year back into the partnership to fix your at-risk situation.

Further reading.

[Mike9241]

@user17760361635 Complicated situations are often the reason taxpayers use paid professionals. There are many forms, schedules and situations not handled by Turbotax to keep the cost of the software low if you think $200 is a lot, it's not when compared to what a pro would charge. Their time at over several hundred $ per hour + computer usage charges.