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ILLMAS

QBI you vs them

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I've been digging around ATX and Proseries to see if in anywhere one can check-off to let the K-1 recipient know they qualify QBI or the person preparing the tax return know.  Does it exist and maybe I am not seeing it?  I would hate for the IRS to challenge a TP because their preparer took QBI on a candy store or any non-qualifying business.

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1 hour ago, ILLMAS said:

I've been digging around ATX and Proseries to see if in anywhere one can check-off to let the K-1 recipient know they qualify QBI or the person preparing the tax return know.  Does it exist and maybe I am not seeing it?  I would hate for the IRS to challenge a TP because their preparer took QBI on a candy store or any non-qualifying business.

QBI is not determined by the person that creates the K-1.  There are several other factors, that determine I a K-1 qualifies for QBI.

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I disagree.  The person creating the K-1 has to indicate to the partner/shareholder/REIT owner how much of the income generated is from QBI sources.  It is reported on the K-1 on lines 20/17/14 (I am not sure of the exact line numbers) to be input onto the K-1 worksheet of the final personal tax return.  When preparing the personal tax return we must include all forms of QBI, including Schedule C (if any), to determine the final amount of QBI, subject to taxable income limitations.

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I agree the information MUST be on the K-1 for the personal return preparer to then see if they still qualify.  3 different update seminars I went to said that was going to be the biggest problem this year and also a big liability for the entity preparer if they don't include it on K-1's.

 

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On 1/4/2019 at 4:04 PM, cred65 said:

It is to appear on Code 17 Lines V,W,X,Y,Z and entered under Detail of K-1

You sure about this? Line 20 instructions for code z

Code Z. Section 199A qualified business
income.
Use the appropriate worksheet to
report your portion of qualified business
income.
Qualified Business Income—Simplified
Worksheet, line 1. See the Instructions for
Form 1040.
Pub. 535 Worksheet. If a specified service
trade or business, see Schedule A; if you are
electing to aggregate this trade or business
with another, see Schedule B; if any of your
qualified trades or businesses generated a
net loss, see Schedule C; otherwise enter
information on lines 1 and 2

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