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QBI On Retired Person Return

Forum|Forum|5 years ago
March 14, 2021
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Working on TT for a retired individual and I noticed the form for Qualified Business Income Deduction (form 8995) was entered. This person does not have a business and lives completely off retirement savings. What to do?

Thank you,

Best answer by ColeenD3

It probably came from a 1099-DIV for a REIT.

Under the Tax Cuts and Jobs Act of 2017, though, REITs have been afforded a new tax preference: the IRC Section 199A deduction for “pass-through” businesses, that allows for a 20% deduction of any qualified REIT dividends against that very income, resulting in an effective 20% reduction in the tax rate on REITs (where the top 37% tax rate becomes “just” 29.6% instead).

REIT

ColeenD3Answer

It probably came from a 1099-DIV for a REIT.

Under the Tax Cuts and Jobs Act of 2017, though, REITs have been afforded a new tax preference: the IRC Section 199A deduction for “pass-through” businesses, that allows for a 20% deduction of any qualified REIT dividends against that very income, resulting in an effective 20% reduction in the tax rate on REITs (where the top 37% tax rate becomes “just” 29.6% instead).

REIT