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Qualified Business Income (QBI)

QBI calculation

Business activity income (loss)

The qualified business income (QBI) for each activity is equal to the net income of the activity. The QBI from a Page 1 activity is equal to Form 1065, page 1, line 22, less the income from a farm activity and a pass-through entity.
QBI income or loss calculations
Other income (loss) is the sum of these:
Other deductions is the sum of these:
Specially allocated farm income
Royalty deductions
Specially allocated oil and gas income
Oil and gas production taxes
Specially allocated Form 4797 ordinary income
Oil and gas dry hole costs
Specially allocated taxes
Oil and gas lease operating expenses
Specially allocated depletion
Oil and gas other expenses
Specially allocated meals
Oil and gas direct depreciation
Specially allocated page 1 depreciation, if included with the activity
Oil and gas allocated overhead
Specially allocated cost of goods sold depreciation, if included with the activity
Specially allocated royalty depreciation
Specially allocated farm depreciation, if included with the activity
Specially allocated rental real estate depreciation, if not included in the activity
Specially allocated other rental depreciation, if not included in the activity
Specially allocated farm rental depreciation, if not included in the activity
Specially allocated farm depreciation, if not included in the activity
Specially allocated page 1 depreciation, if not included in the activity
Specially allocated cost of goods sold depreciation, if not included in the activity

Qualified W-2 wages

The application uses the wages entered in the following fields for each activity reported on the Section 199A Information Worksheet.
Activity and fields
Activity
Fields included
Page 1
  • Salaries and wages before employment credits
     on the Inc screen.
  • Cost of labor
     on the A screen.
Farm
  • Labor hired
    on the F-2 screen.
Farm Rental
  • Labor hired
    on the 4835-2 screen.
Rental
  • Wages and salaries
     on the Rent screen.
You can also force the amount of W-2 wages for the activity in the
Qualified W-2 wages (Force)
 field on the QBI screen if the wages entered aren't the Qualified W-2 wages.
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