QBI Carryover After Business Closes

Forum|Forum|3 years ago
February 2, 2023
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What happens to QBI loss carryforward after a business closes? I'm a partner in an LLC that liquidated in 2022 and I received a final K-1. I have a QBI loss carryforward from prior years. What happens to it on my 2022 personal return? Does it convert to an ordinary loss? If so, how do I effect that in Turbo Tax?

ThomasM125

The qualified business income (QBI) loss carryforward expires in the year you close the business. It is not deductible against taxable income, only against QBI income, which you won't have anymore once the business is closed. If the business had continued and generated QBI in future years, the QBI loss carryforward would have been used to reduce it and in so doing reduce your QBI deduction.

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