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Troubleshoot qualified business income deduction calculations

Follow these suggestions to help troubleshoot the following issues related to qualified business income deduction (QBID) calculations.

Schedule C, Business

Schedule C activity doesn't appear on Form 8995-A: Verify the activity has a Business Name
in the C screen in the Business folder.
A business is included in the QBID calculation but doesn't qualify: UltraTax CS automatically includes Schedule C businesses as trade or business for the qualified business deduction. For activities that don't qualify, enter 0
in the Qualified business income (Force)
field on the C-3 screen.

Schedule E, Rental

Oil and Gas Well type is coded as Royalties (code 6) in the Rent & Royalty folder of the OGWell screen and isn't included in QBI: As a general rule, if the royalty is Oil and Gas and it's a working interest, Schedule C is used per the Schedule E instructions. Oil and Gas income that isn't a working interest is generally investment income. If this royalty is considered a trade or business instead of an investment, use the Qualified Business income (Force)
field on the Rent-2 screen.
A rental isn't calculating QBI even though it's marked as a Section 162 trade or business in the Rent-2 screen: Verify that the property type isn't a Vacation/Short-term, Royalties, or Nonbusiness personal property on the Rent screen for this property. These items aren't included in the QBI calculation. In addition, rental properties with a foreign address aren't included. The Qualified Business Income Calculation Worksheet in the Schedule E Form View will add the following statement after line 10: This activity is not a trade or business for QBID
.

Schedule F, Farm

A Schedule F activity is automatically included in the QBID calculation but doesn't qualify: UltraTax CS automatically includes Schedule F activities as businesses that are trade or business for the qualified business deduction. For activities that don't qualify, enter 0
in the Qualified business income (Force)
field on the F-3 screen. For Rental and Farm rental activities, make the determination of trade or business on the 4835-2 screen.

Schedule K-1, 1065 and 1120S

Every activity from a single 1065 has data-shared into a single K-1 instead of separate activities, combining everything in the return: In the 1040 return, select File
, Client Properties
, then Advanced Properties
and mark Elect to import the data share of 1065 Schedule K-1’s by the per activity method, in lieu of the single K-1 method
. This will import the information separately for each activity.
The specified service business checkbox on the K1QBI screen isn't marked automatically when data-shared from the 1065 or 1120S return: Verify the activity has the Specified service business
checkbox marked in the 1065 or 1120S return in the activity's QBI screen.

This article applies to:

PRODUCT: UltraTax CS
Return type: 1040 Individual

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