Qualified Business Loss Carryforward

[daphene-007]

I have $34,789 in QB Loss Carryforward with a postive profit for my business of $5,275 + taxable income of $34,395 and a tax liability of $5,041 resulting in a balance due of $2,069.

Question: How can I use my QBLCarryforward to reduce my tax liabity?

Question: Do I wipe out the taxable income or tax liability amount on Schedule 1 line z?

Question: How do I reduce my QBLCarryfoward from the amount on Schedule 1 line z?

Thank you!

[tagteam]

I'll page @Mike9241. Check back later.

[Mike9241 · Accepted solution]

Use of a QBI loss carryover can never reduce your taxes. The QBI is a deduction (line 13 of form 1040) to arrive at taxable income. Use of the carryover reduces the QBI deduction resulting in higher taxable income and hence higher income taxes. 

the $35K QBI loss carryforward is reduced by the $5K of current QBI income. so your QBI deduction would be zero.  You have a QBI loss carryover for 2025 of about $30K.  the QBI tax laws (IRC 199A) expire at the end of 2025. Noone knows at this point whether the law will be renewed or if it isn't do you still have to keep track of it in case in some future year the law is renewed. 

there should be no QBI deduction on schedule 1. don't have a clue as to what you have done or are doing. 

business income/loss - schedule C is reported on line 3 of schedule 1

schedule E business income/loss is reported on line 5 of that schedule 

the QBI deduction, if any, is not reported on these forms or schedules. The info is supposed to flow to form 8995/8995-A where the QBI deduction is computed.

[daphene-007 · Accepted solution]

Thank you Mike for all your tax expertise. I did not do any crazy lol - You're the BEST!

[Stonehenge Property Management]

Mike,

Can you tell me why anyone would want to carry forward the loss that would only reduce current QBI?

I don't think there is a requirement to file 8995, so if you have a loss in a current year, why not just not file 8995 and therefore not have a loss carryforward? Am I missing something?

Thanks, David