Indiv K-1 mod screen 20.2 Reduce QBI by SE health

[accoun5]

The IRS FAQ and reg says to reduce QBI by SE health. Why does Lacerte not do this automatically? Lacerte makes us check a box to reduce QBI by SE health. There is alot of confusion about this in the community. If we don't follow a reg and don't check the box, we are supposed to disclose and I would think do an 8275. There needs to be a diagnostic prompting us to disclose disagreement with the reg for people who don't check the box.

[sjrcpa]

Because FAQs are not authoritative (unless/until the new IRS position kicked in) and many think the Reg does not follow the law.

[accoun5]

Thanks-I've read the regs are final. Someone told me 

IRS FAQ 39 and the TD 9847 Reg. Sec. 199A-3(b)(1)(vi)  say that for the more than 2% S Corp shareholder health insurance, QBI is reduced at both the entity and individual level resulting in a double dip. 

So I guess if you don't check the box to reduce QBI by SE health again at the individual level, then we need to disclose on 8275 or on a statement with the return. Here is what I found online from Bradford tax Google search:

https://bradfordandcompany.com/wp-content/uploads/2020/11/199AFAQ.pdf