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QBI

How UltraTax CS calculates QBI

Business income equals the net income, except for income from the Page 1 activity. Business income from a Page 1 activity equals Schedule K, line 1 minus the income from a farm activity and a pass-through entity.
UltraTax CS calculates the allowable Section 179 deduction allocated to the activity. Any Section 179 carryover from the prior year goes to the Page 1 QBI activity. If the Page 1 activity doesn’t exist, the Section 179 carryover from the prior year goes to the next available QBI activity.
The Section 1231 gain (loss) goes to the Page 1 QBI activity. If the Page 1 activity doesn't exist, the Section 1231 gain (loss) goes to the next available QBI activity.
UltraTax CS uses the wages entered in the following fields for each activity reported on the Section 199A Information Worksheet:
  • Officer's compensation before employment credit reduction,
     net of
    Compensation claimed elsewhere on return
     on the
    Inc
     window.
  • Salaries and wages before employment credit reduction
     on the
    Inc
     window.
  • Cost of labor before employment credit reduction
     on the
    A
    window.
  • Labor hired before employment credit reduction
     on the
    F-2
    window.
  • Labor hired before employment credit reduction
     on Screen 4835-2
  • Wages and salaries before employment credits
     on Screen Rent
Wages in the input screens should be on the Form W-2 wages. If not, you can force W-2 wages for an activity in the
W-2 wages (Force)
 field on the
QBI
 window.
Each member of the consolidated S Corporation that qualifies as a trade or business for Section 199A has to force the amount of qualified business income and W-2 wages. Go to the
QBI
 screen in the
Income and Deductions
 folder.
The amount for unadjusted basis immediately after acquisition (UBIA) of qualified property transfers from the asset module. This information shows the cost of the asset that qualifies for the QBI deduction. The amount is included on the Section 199A Information Worksheet.
Qualifies as trade or business for Section 199A
 in the
QBI
 window has to be marked.
The Qualified Property Report prints when you select
Yes
 in the
Qualifies as trade or business for Section 199A
 field for the asset. Open the asset and select
Setup
,
Activity
.
To exclude an asset from the QBI deduction and from the Qualified Property Report, go to
Asset detail
,
Other
 and check the
Exclude asset from qualified business income deduction
 box.
Assets are qualified property if they are tangible depreciable assets held in the trade or business at the close of the tax year. The depreciable period also can't end before the end of the tax year.
Depreciable period
 is the later of the following: ten years after the asset was placed in service, or the last year of the recovery period.
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