K1 Box 20 Code Z Cannot Leave Blank

[DaveF1006]

Yes, in order to qualify for QBI, you would need to have net income for the year. if you suffered rental losses for the year without having offsetting income reported elsewhere, you will not be eligible for QBI. I apologize for missing this earlier. 

[Daniel92612]

Thank you. I've been trying for 4 hours to get this work !!!

[Daffy2022]

Great tip btrav68, you were right that solved the issue, I completly overlooked that entry 

[EMIH]

This is exactly the problem Im having!  

I have no business  income, just interest income in box 5, and a W in 13 with a statement.  In box 20, I have an A - with the interest income and the dreaded "Z "with STMT written. On Statement A under "Other Deductions" I have a $ amount under other deductions, see ATT and Rental Deductions on the back with the amount.  I keep getting an error  message.  Doesn't matter if I put a -730 or 0 when entering the box 20 info - it keeps giving me an error message about 199A income entered on statement A.  I do not have a 199A or any income from this K1!!! 

In going to the forms, I noticed that I do have REIT Div from some investments which have nothing to do with the K1, so I have checked the box "Only source 199A REIT Div, not business income.

I am unable to continue - been trying to figure this our for over a week now.  Im tempted to just leave the "Z" off or try to send this through with an error message.  HELP!!!

[joann44]

If you havce a Code Z in box 20 then you absolutely do have 199A income.   That's what the code means.  You need the information from the statement to complete your return.  You do NOT check the REIT box, you're going to need to find the information that pertains to your 199A income on the statement attached to your K-1 for Box 20 

[TeresaM]

The IRS Partner’s Instructions for Schedule K-1 (Form 1065) state:

Box 20 Code Z. Section 199A information. Generally, you may be allowed a deduction of up to 20% of your net qualified business income (QBI) plus 20% of your qualified REIT dividends, also known as section 199A dividends, and qualified PTP income from your partnership. The partnership will provide the information you need figure your deduction.

There is a long list of items to which this entry could pertain and it would be best to ask the person who issued the Schedule K-1 to what it should be matched. It is generally in the statement attached to the Schedule K-1 but it sounds as if it was not included. 

For more information about Code Z. Section 199A information, please see page 18 and 19 of the IRS instructions for Schedule K-1. 

[EMIH]

I have gone to the accountant that completed this several times and there is no income - $37 in interest which is under A in Box 20. Never in the past have they used the code Z - we lose money every year just from paying taxes, insurance and the accountant to complete the K-1. The last time I emailed them I was told to not mark the 20Z box since there is no QBI income to offset the K-1 and that it seems that tt can't deal with the entry if there is nothing in the income box.  Since I have nothing else, will this trigger an audit since the K-1 has a Z?  They dont plan on doing an amendment...

[RobertB4444]

The entry will certainly not trigger an audit of you.  The IRS looks for forms to match so enter your K1 as you received it and you should be fine.

@EMIH