How to get my 4797 part 2 income to transfer on to the QBI worksheet?

Forum|Forum|3 years ago
September 11, 2022
1 reply
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As a section 475 mark to market trader, I am required to report all capital gains on form 4797. I've read that section 475 traders explicitly qualify for the QBI deduction. However, in turbotax (desktop) it appears that QBI is only calculated from schedule C income. For a section 475 trader, schedule C only contains deductions, not capital gains, so schedule c ends up showing a negative income. All the positive income is located on form 4797 part 2, and does not appear in the QBI calculation.

How can I make that 4797 income appear in the QBI calculation?

Anonymous_

Employee

Hopefully, you are using a desktop version of TurboTax because you will have to resort to using Forms Mode.

Regardless, you might want to contact Support tomorrow.

What is the TurboTax phone number? (intuit.com)

B771Author

I figured out how to do it. The following answer is for the benefit of others with the same problem.

1) Go into forms mode. (Requires TurboTax Desktop.)

2) Find Schedule C for the business that earned the income that is listed in the 4797.

3) Scroll down to the section of Schedule C, named "Qualified Business Income Deduction Smart Worksheet".

4) Go to line "E2, Adjustments to qualified business income".

5) Type the income from 4797, into this adjustments field. The income should now appear in the associated QBI worksheets and calculations.

6) Click through the Schedule C section one more time in interview mode. You might or might not be prompted with new questions after changing the form directly.