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Lacerte Aggregation of Business Operations Section 1.199A-4

Intuit

Lacerte Aggregation of Business Operations Section 1.199A-4

How do I link my business income to show aggregation of business operations as discussed in Section 1.199A-4 and provide an explanatory statement?

Solution

  1.  Go to your first business:
    • Screen 16, Business Income (Schedule C)
    • Screen 18, Rental & Royalty Income (Schedule E)
    • Screen 19, Farm Income (Schedule F / Form 4835)
    • Screen 20.1, Partnership Information
    • Screen 20.2, S Corporation Information
    • Screen 20.3, Estate and Trust Information
  2. Within the business activity locate the applicable section:
    • Screen 16, Qualified Business Income Deduction section
    • Screen 18, Qualified Business Income Deduction section
    • Screen 19, Qualified Business Income Deduction section
    • Screen 20.1, Line 20 - Other section
    • Screen 20.2, Line 17 - Other Information section
    • Screen 20.3, Line 14 - Other Information section
  3. Enter a '1' in the following field to indicate your first aggregate business in the following field:
    • Screen 16, Aggregate Business Number (code 453)
    • Screen 18, Aggregate Business Number (code 450)
    • Screen 19, Aggregate Business Number (code 453)
    • Screen 20.1, Section 199A (20Z - 20AB) Aggregate Business Number (code 1152)
    • Screen 20.2, Section 199A (17V - 17X) Aggregate Business Number (code 1152)
    • Screen 20.3, Section 199A (14I) Aggregate Business Number (code 1152)
  4. Enter a description in the following field to explain how these businesses are allowed to be aggregated:
    • Screen 16, Description of aggregated businesses and explanation of how they are allowed to be aggregated. (CTRL+E) (455)
    • Screen 18, Description of aggregated businesses and explanation of how they are allowed to be aggregated. (CTRL+E) (452)
    • Screen 19, Description of aggregated businesses and explanation of how they are allowed to be aggregated. (CTRL+E) (455)
    • Screen 20.1, Explanation of Aggregation (code 1160)
    • Screen 20.2, Explanation of Aggregation (code 1160)
    • Screen 20.3, Explanation of Aggregation (code 1160)
  5. Repeat steps 1 through 3 for each additional business activity to be included in Aggregate Business Number 1.
    • Note: The explanation only needs to be entered once for each aggregated business income grouping.

To create a second aggregate business grouping, repeat steps 1 through 5 marking as Aggregate Business Number 2.

  1.  Go to your first business:
    • Screen 21, Business Income (Schedule C)
    • Screen 23, Rent & Royalty (Schedule E)
    • Screen 24, Farm (Schedule F)
    • Screen 25, Passthrough K-1s
  2. Within the business activity locate the applicable section:
    • Screen 21, Qualified Business Income Deduction section
    • Screen 23, Qualified Business Income Deduction section
    • Screen 24, Qualified Business Income Deduction section
    • Screen 25, Other (20) section
  3. Enter a '1' in the following field to indicate your first aggregate business in the following field:
    • Screen 21, Aggregate Business Number (code 453)
    • Screen 23, Aggregate Business Number (code 453)
    • Screen 24, Aggregate Business Number (code 451)
    • Screen 25, Section 199A - Aggregate Business Number (code 1152)
  4. Enter a description in the following field to explain how these businesses are allowed to be aggregated:
    • Screen 21, Description of aggregated businesses and explanation of how they are allowed to be aggregated. (CTRL+E) (455)
    • Screen 23, Description of aggregated businesses and explanation of how they are allowed to be aggregated. (CTRL+E) (455)
    • Screen 24, Description of aggregated businesses and explanation of how they are allowed to be aggregated. (CTRL+E) (453)
    • Screen 25, Section 199A - Explanation of Aggregation (code 1160)
  5. Repeat steps 1 through 3 for each additional business activity to be included in Aggregate Business Number 1.
    • Note: The explanation only needs to be entered once for each aggregated business income grouping.

To create a second aggregate business grouping, repeat steps 1 through 5 marking as Aggregate Business Number 2.

When aggregating Schedule E income, and making the Safe Harbor election you'll want to avoid producing an election for each of the activities in the aggregated grouping.

  1. Go to the Schedule E Screen.
    • Individual Screen 18, Rental & Royalty Income (Schedule E)
    • Fiduciary Screen 23, Rent & Royalty (Schedule E)
  2. Scroll down to the Qualified Business Income Deduction section.
  3. Check the box for Claiming safe harbor on rental real estate per IRS Notice 2019-07.
    • Note: This should only be checked on one of the activities in the grouping. In the left navigation panel, select the next activity within this aggregate grouping.
  4. Within the Qualified Business Income Deduction section, enter a '1' in the field for Business is a qualified trade or business: 1=yes, 2=no [O].
    • Note: When you check the safe harbor election, this signifies the activity as a qualified trade or business. Marking a yes here, satisfies this requirement while preventing safe harbor election statements to be generated for every activity within the aggregate grouping.
To make an election for a second aggregate business grouping, repeat steps 1 through 4.

Forms View and Filing the Return

Worksheets  Schedule B - Aggregation of Business Operations

Once complete, the aggregate income will be displayed in Forms view within the Worksheets.  Each aggregate grouping will be listed separately.  Example; Aggregation 1, Aggregation 2, etc.

The Schedule B - Aggregation of Business Operations worksheet is automatically included as a statement with the e-filing of the tax return. The Lacerte options to Auto Generate and Attach PDFs to EFiles should be set to 'yes' for this to occur.

Note: If you are on a network, you will want to check both local and primary options.

  1. Go to the Settings dropdown menu.
  2. Select Options (network also check Primary Options).
  3. Click the Setup tab.
  4. Verify Auto Generate and Attach PDFs to EFiles is set to 'Yes'.
  5. Click OK to save and close the window.

Once the e-file has been created within the e-file wizard, the following information will be displayed on the General Information page in Forms view:

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