PTPs & QBI - An individual receives K-1s from 10 PTPs for 2018. In Box 20AD, some K-1s have income and some have losses. Lacerte is currently netting all the income and losses together to arrive at qualified PTP income or loss for purposes of the worksheet (line 28) that supports the Form 1040, line 9 QBI deduction. Some of the losses are disallowed due to Sec. 469 limitation and are excluded from the individual's taxable income for 2018. The disallowed losses should not be included in QBI income for 2018 per Reg. Sec. 1.199A-3(c)(3) and Publication 535. Additionally, Lacerte does not track the $10,000 loss as a carryforward to a future year.
Solved! Go to Solution.
I am currently working on a 2019 trust return in Lacerte. The program is correctly not including any passive losses disallowed from PTP's in QBI, but incorrectly including disallowed passive losses from NON PTP partnerships in QBI. When do you expect this might be fixed in the program??
I am correcting my previous post. The 2019 program (trust return) is incorrectly including disallowed passive losses in QBI for BOTH PTP's and other partnerships. I had to manually calculate and override the QBI input for all the Schedule K-1's that had disallowed passive losses. What a pain!! This really needs to be resolved.......
@IntuitBettyJo please see Reg. 1.199A-3(c)(3)(ii) for the requirement that the PTP income/loss is included or allowed in determining taxable income for the taxable year. Thanks in advance for looking into this...
That is the issue we are trying to bring to your attention that Lacerte is not calculating correctly. If the PTP loss is disallowed for regular tax purposes, the loss should NOT be included in QBI.
Lacerte is not calculating QBI correctly in the Fiduciary module. Reg. 1.199A-3(c)(3)(ii) requires that PTP income/loss be included or allowed in determining taxable income for the taxable year before it is included in QBI. Lacerte is incorrectly including ALL passive losses from PTPs in QBI and not limiting it to the portion included in taxable income for the year. Please give this a priority review. It appears to be a major error in calculation.
I am working on a 2019 trust return in Lacerte. The program is properly not including any disallowed passive losses from PTP's in QBI, but is incorrectly including disallowed losses from NON PTP partnerships in QBI.