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S Corp K-1 and QBI calculation for Code V

Sheri1
Level 2

I have two 50/50 shareholders and only one took compensation.  There are no distributions and there is a loss for the year 2019.  What should the K-1's look like for Statement A Qualified Business Income, Box 17, Code V?

Currently it is showing the loss split 50/50, with W-2 wages split 50/50 and the qualified property is split 50/50.  Is this correct?  it is not a specified trade or business.  This is my first S Corp in a few years and I am not sure I am understanding how the shareholder comp should show up for Qualified Business Income as I am reading that it should be excluded from Qualified Business Income but only one shareholder took compensation.  I appreciate your help.

 

   

 

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IRonMaN
Level 15

Just let the software do its thing and don't try to adjust anything.

Armpit sniffer. Yup, checked out the help wanted ads and found the job. With my nose, how can I go wrong?

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IRonMaN
Level 15

50/50 sounds about 100% right.  Wages for QBI are total wages, not individual shareholder wages.

Armpit sniffer. Yup, checked out the help wanted ads and found the job. With my nose, how can I go wrong?
Sheri1
Level 2

I also read though that Shareholder reasonable compensation are not QBI wages, so do I take the amount off of the Statement A of K-1?

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Sheri1
Level 2
 
 
 

I had a diagnostic saying that the tax program assumes that wages are 199 A and if they're not, I need to manually adjust.  So since the only wages paid are for one of the two shareholders, I am wondering if since its reasonable comp that it should not show up as wages on statement A of the K-1.  

 

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sjrcpa
Level 15

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Sheri1
Level 2

Please forgive my ignorance, are you saying that I exclude shareholders wages from the 199 A wages or that they should be included in the 199 A wages?  

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IRonMaN
Level 15

Just let the software do its thing and don't try to adjust anything.

Armpit sniffer. Yup, checked out the help wanted ads and found the job. With my nose, how can I go wrong?

View solution in original post

Sheri1
Level 2

Thank you. I appreciate you getting back to me!