Real estate llc partnership (husband/wife) QBI flow through

[elbanev]

We own a rental home where we rent it for short term rentals and it's in llc partnership in which we are both active participants.  

In previous years, we've had negative ordinary business income and that has flowed through to our personal return. This year, we the business is showing about $5000 on line 23 of the 1065 for Ordinary Business Income.  

My question is do I have to worry about lines 24,25, 26, and 27 as this $5000 should just flow through to the personal taxes.  Any tax or underpayment will be calculated there (personal taxes).  Is this a correct understanding?

Thanks,
Joe

[RobertB4444]

I assume that you are talking about lines 24 to 27 of your 1065 K-1.  Yes, enter the information from them into the return.  No, it doesn't really effect your tax return.  Now.  But it is establishing the basis that you have in the partnership so that when you sell it (if you sell it) you will reduce your gain on the sale.

@elbanev 

[elbanev]

Sorry, I wan't clear, lines 24 - 27 of the 1065.  It talks about interest due to look back method. Line 26 refers to BBA AAR imputed underpayment.  In years passed these line have not been filled out as I have negate business income.  

I don't think these lines would pertain to a pass through real estate entity but wanted to double check.  I have no long term contracts or short term contract and any underpayment would be done on the personal side.

Can you help clarify?

Thanks,
Joe

[elbanev]

Any update here with my clarification?

Thanks,
Joe

[DaveF1006]

No. You are not required to fill out this section of the return unless you have specific knowledge of these events. 

@elbanev