Q: Most of examples shown by TT is for service part, such as lawyers, accountants etc. My assumption is this trading is SSTB activity, even though I don't provide any services?
for purposes of QBI deduction under reg 1.199A-5
an SSTB
trading in securities, commodities, or partnership interests
dealing - regularly purchasing securities, commodities, or partnership interests from selling such to customers or regularly offering to enter into, assume, offset, assign, or otherwise terminate such positions with customers
financial services other than banking
Q: Does it matter how this trade or is this trading without 475 election effect answer to SSTB?
I do own partnerships K1 entities. These are public traded pipeline partnerships and I am a passive investor so there is no overlap in terms of business.
yes it matters. capital gains are specifically excluded from QBI. see below. with 475 the election trading gains/losses are ordinary so included in QBI
Q: Where on Tax return one has to check YES regarding one’s business activity is labelled as SSTB?
when you come to the QBI section in schedule C there should be a checkbox for SSTB
only check SSTB in the QBI section for those activities that are SSTB
each PTP stands on its own so it's possible some of yours could be SSTBs
the PTP would probably include a statement in supplemental info if it was.
https://www.law.cornell.edu/cfr/text/26/1.199A-5
(B)Exceptions (NOT QBI)
The following items shall not be taken into account as a qualified item of income, gain, deduction, or loss:
(i)Any item of short-term capital gain, short-term capital loss, long-term capital gain, or long-term capital loss.
(ii)Any dividend, income equivalent to a dividend, or payment in lieu of dividends described in section 954(c)(1)(G). Any amount described in section 1385(a)(1) shall not be treated as described in this clause.
(iii)Any interest income other than interest income which is properly allocable to a trade or business.
(iv)Any item of gain or loss described in subparagraph (C) or (D) of section 954(c)(1) (applied by substituting “qualified trade or business” for “controlled foreign corporation”).
(v)Any item of income, gain, deduction, or loss taken into account under section 954(c)(1)(F) (determined without regard to clause (ii) thereof and other than items attributable to notional principal contracts entered into in transactions qualifying under section 1221(a)(7)).
(vi)Any amount received from an annuity which is not received in connection with the trade or business.
(vii)Any item of deduction or loss properly allocable to an amount described in any of the preceding clauses.
