@itonewbie Thanks so much for your in depth explanation on this. I too was not understanding why charitable contributions by an S-Corp should in any way affect QBI. But until now I couldn't find anything to support that. One question I have been trying to find an answer for and the main cause of so much confusion is that if charitable contributions are not to be included in QBI, then why do all the new tax form instructions specifically include "charitable contributions" in their list of items to include when reporting QBI items to the shareholder? (See Question #2 on the QBI Flowchart at the top of page 39 in the 2019 Form 1120S Instructions and page 5 of Form 8995 Instructions). After doing some further research after reading your messages here, I think I finally found my answer. I noticed that the wording on the Flowchart Question #2 in the 1120S Instructions say the list of items "may include", emphasis being on the "MAY" (although that word "may" is left out of the Form 8995 Instructions). And with my further research I learned that some types of corporations CAN deduct certain charitable contributions AS business expenses. This relates to what you were saying about how §162 states that charitable contributions are not to be treated as business expenses. But from an article I ran across (www.perlmanandperlman.com/irs-says-benefit-corporations-may-treat-payments-charity-business-expense) I learned that if a corporation is a "benefit corporation" they can treat charitable contributions as regular business expenses because those types of companies receive some benefit in connection with their contribution. So I am concluding that S-Corps that are benefit corporations SHOULD include charitable contributions in their QBI, since it is a normal business deduction for them. Otherwise, any other S-Corp should NOT include charitable contributions in their QBI because those contributions are not attributable to the trade or business (the company receives no direct benefit for their contribution). This finally explains to me why charitable contributions are included in the tax form lists, because there are instances (although rare) where it would be included. To quote you earlier, I too wish the IRS would be more upfront with their guidance! 😀 Could save a lot of confusion and headaches for all of us! Thanks again for your insight and please let me know if you agree with my thought process on this.