As of March 5, 2020, QBI deductions are not being computed and deducted in TurboTax for section 199A REIT entries indicated as Box 14 code I entries on the K-1 form. To claim the deduction, override line 9 of Turbotax form “Qualified Business Income Deduction Summary” with the total of section 199A REIT dividends reported on your K-1. The value will pass to form 8995 and the computed deduction will appear on line 10 of your 1040. This deduction pass through is permitted for beneficiaries of charitable trusts.
TurboTax does compute the QBI deductions from K-1s. If you manually override the forms, you will not be able to e-file and you void the accuracy guarantee. As long as you have the code I in Box 14, the QBI will be generated. There are a few questions that need to be answered in addition to using the Code I entry on the K-1. Type qbi into the search bar and use the Jump to qbi link to be taken to the follow-up questions that need to be answered to generate the deduction.
Your solution does not work. TurboTAX 2019 changed the K-1 entry questions from TurboTax 2018. TurboTax 2019 correctly applied the QBI section199A REIT dividend deduction using information reported on my charitable trust's K-1. In 2018 the Turbotax code for the trust K-1 box 14 entry was “IC- section 199A REIT dividends” and the 2019 code is “I – Section 199A information”. Also in 2019, two additional question pages were added for information on the employer for the business and information on the 199A income or loss. Selecting code I and answering the questions on the new pages does not carry the REIT dividend to form 8995 or the deduction to the 1040. I do not e-file, so the override I have to make is not a problem. I have entered my data any number of ways including starting from scratch, and the result is alsways the same, no deduction appears on line 10 of the 1040.
Typo in my response, second sentence should begin "TurboTax 2018 correctly .....
The issue with REIT 199A dividends reported on a trust Form 1041 Schedule K-1 is being worked on. The issue was scheduled for resolution on 3/6/2020, but may take a couple of days to show up as an update.
The issue is that the REIT net dividends in section D-2, Line I 3 of the trust K-1 don't "flow" to the Line 9 of the QBI Ded Summary.