Schedule K-1 (form 1065) - what's the difference between Regular Tax and QBI columns?

[gryrps]

As a result of the federal smart check, TurboTax reported missing "QBI Passive Op Loss". On Schedule K-1 (Form 1065), in the section titled "Carryovers to 2020 Additional Info for Section 199A Deduction", under "Disallowed Passive Losses by Year and Type", the missing entry is for 2019 line "G Operating loss" in the QBI column. There is an entry in the Regular Tax column. I have my K-1s from the business for each year, but I don't know what amount to enter in the QBI column. What should be entered there and how is that amount different from the Regular Tax column?

[MarilynG1]

What type of Business does your QBI apply to?

If it's rental activity on Schedule E, you can probably enter $0 for QBI Passive Operating Loss.

If it's a Schedule C business, your Net Loss from 2019 would be entered (may be same as Regular Tax amount shown).

Click this link for more info on QBI Carryover Loss. 

[gryrps]

Hi Marilyn,

The link you provided to QBI Carryover Loss highlights my same situation/question (the same entry is missing) except, for me, the business is not a rental business. The business is a restaurant that was quite successful pre-pandemic, but as you can imagine, not in the last year. I am just a passive investor in the restaurant, a limited, domestic partner. I do not materially participate in anything to do with the restaurant. So where do I get the missing value for QBI Passive Op Loss?

[DianeW777]

Check your Form 8995 (or 8995-A) for 2019 to see if there is an overall loss of income.  If so, then this is the figure you enter in the line smart check.  If you did not have an overall loss in 2019 then you can enter zero.

The qualified business income deduction (QBID) requires that any loss from the prior year must be carried forward to be netted with any current positive income to arrive at the correct QBID.

Losses are usually beneficial for tax purposes, losses from passthrough entities potentially adversely affect the 20% QBID under Sec. 199A. These losses, referred to as negative QBI or qualified business losses, decrease positive QBI from other sources, and the remaining losses carry forward to offset future QBI, reducing the amount eligible for the 20% QBID.

[taxquestions44]

You indicate below that the QBI loss may be the same as the regular tax amount.  I just want to confirm that because, for me, they mirror each other each year.  Is that okay?

[PatriciaV]

Yes, it's not unusual to see a consistent trend that regular tax and QBI are the same each year.

@taxquestions44