How do I make adjustments to qualified business income (QBI) for disallowed losses?
If you have a disallowed loss, the loss isn't included in income during the year and also isn't a part of your QBI that year. Your loss won't be included on your return until a future year when the loss is allowed.
If your trade or business is a specified service trade or business (SSTB), the year the loss occurred is used to determine if the amount is QBI. If your income is within the phase-in range in that year, you must determine the applicable percentage of suspended losses or deductions includible in QBI. The losses continue their status as either items of QBI or non-QBI for all subsequent years. The IRS has provided a worksheet that they consider a reasonable method of tracking these losses and including them in QBI.
If you need to adjust your QBI based on any allowed losses as shown on the worksheet you can do so by entering a modified QBI amount.
If your trade or business is a specified service trade or business (SSTB), the year the loss occurred is used to determine if the amount is QBI. If your income is within the phase-in range in that year, you must determine the applicable percentage of suspended losses or deductions includible in QBI. The losses continue their status as either items of QBI or non-QBI for all subsequent years. The IRS has provided a worksheet that they consider a reasonable method of tracking these losses and including them in QBI.
If you need to adjust your QBI based on any allowed losses as shown on the worksheet you can do so by entering a modified QBI amount.
