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Formularz 8995 Instrukcje

Instrukcje dotyczące formularza 8995, Uproszczone odliczanie dochodu z działalności gospodarczej

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Department of the Treasury  
Internal Revenue Service  
2023  
Instructions for Form 8995  
Qualified Business Income Deduction Simplified Computation  
Section references are to the Internal Revenue Code unless  
otherwise noted.  
trust's distributable net income (DNI) for the tax year distributed  
(or required to be distributed) to the beneficiary or retained by  
the estate or trust. If the estate or trust has no DNI for the tax  
year, section 199A items are allocated entirely to the estate or  
trust.  
Although estates and trusts may compute their own QBI  
deduction, to the extent section 199A items are allocable to the  
estate or trust, section 199A items allocated to beneficiaries  
aren’t includible in the estate’s or trust’s QBI deduction  
computation. See the Instructions for Form 1041, U.S. Income  
Tax Return for Estates and Trusts.  
Future Developments  
For the latest information about developments related to Form  
8995 and its instructions, such as legislation enacted after they  
were published, go to IRS.gov/Form8995.  
General Instructions  
Purpose of Form  
Electing Small Business Trusts (ESBT). An ESBT must  
compute the QBI deduction separately for the S and non-S  
portions of the trust. The Form 8995 used to compute the S  
portion’s QBI deduction must be attached as a PDF to the ESBT  
tax worksheet filed with Form 1041. When attached to the ESBT  
tax worksheet, the trust must show that the information is  
applicable to the S portion only, by writing “ESBT” in the top  
margin of the Form 8995. See the Instructions for Form 1041.  
Use Form 8995 to figure your qualified business income (QBI)  
deduction. Individual taxpayers and some trusts and estates  
may be entitled to a deduction of up to 20% of their net QBI from  
a trade or business, including income from a pass-through entity,  
but not from a C corporation, plus 20% of qualified real estate  
investment trust (REIT) dividends and qualified publicly traded  
partnership (PTP) income. However, your total QBI deduction is  
limited to 20% of your taxable income, calculated before the QBI  
deduction, minus net capital gain (increased by any qualified  
dividends).  
Determining Your Qualified Trades or  
Businesses  
Who Can Take the Deduction  
Your qualified trades and businesses include your domestic  
trades or businesses for which you’re allowed a deduction for  
ordinary and necessary business expenses under section 162.  
However, trades or businesses conducted by corporations and  
the performance of services as an employee aren’t qualified  
trades or businesses. Generally, specified service trades or  
businesses (SSTBs) aren’t qualified trades or businesses.  
However, all or a part of the SSTB may be a qualified trade or  
business if your taxable income is at or below the threshold or  
within the phase-in range.  
Individuals and eligible estates and trusts that have QBI use  
Form 8995 to figure the QBI deduction if:  
You have QBI, qualified REIT dividends, or qualified PTP  
income or loss (all defined later); and  
Your 2023 taxable income before your QBI deduction is less  
than or equal to $182,100 if single, married filing separately,  
head of household, qualifying surviving spouse, or are a trust or  
estate, or $364,200 if married filing jointly; and  
You aren’t a patron in a specified agricultural or horticultural  
cooperative.  
As provided in section 162, an activity qualifies as a trade or  
business if your primary purpose for engaging in the activity is for  
income or profit and you’re involved in the activity with continuity  
and regularity.  
Otherwise, use Form 8995-A, Qualified Business Income  
Deduction, to figure your QBI deduction.  
S corporations and partnerships. S corporations and  
partnerships aren’t eligible for the deduction, but must pass  
through to their shareholders or partners the necessary  
information on an attachment to Schedule K-1. See the  
Instructions for Form 1120-S, U.S. Income Tax Return for an S  
Corporation, and Form 1065, U.S. Return of Partnership Income.  
For purposes of section 199A, if you own an interest in a  
pass-through entity, the trade or business determination is made  
at the entity level. Material participation under section 469 isn’t  
required to qualify for the QBI deduction. Eligible taxpayers with  
income from a trade or business may be entitled to the QBI  
deduction if they otherwise satisfy the requirements of section  
199A.  
Cooperatives. Cooperatives aren’t eligible for the deduction.  
Instead, cooperatives must provide the necessary information to  
their patrons on Form 1099-PATR or an attachment to help  
eligible patrons figure their deduction. Certain agricultural or  
horticultural cooperatives may qualify for a deduction under  
section 199A(g). See the Instructions for Form 1120-C, U.S.  
Income Tax Return for Cooperative Associations, for rules  
applicable to agricultural and horticultural cooperatives.  
The ownership and rental of real property may constitute a  
trade or business if it meets the standard described above. Also,  
Rev. Proc. 2019-38 provides a safe harbor under which a rental  
real estate enterprise will be treated as a trade or business for  
purposes of the QBI deduction. Rental real estate that doesn’t  
meet the requirements of the safe harbor may still be treated as  
a trade or business for purposes of the QBI deduction if it’s a  
section 162 trade or business.  
Estates and trusts. To the extent that a grantor or another  
person is treated as owning all or part of a trust or estate, the  
owner will compute its QBI deduction for the portion owned as if  
section 199A items had been received directly by the owner.  
Generally, a non-grantor trust or estate may either claim the QBI  
deduction or provide information to their beneficiaries. In  
determining the QBI deduction or the information that must be  
provided to beneficiaries, the estate or trust allocates section  
199A items based on the relative proportion of the estate's or  
The rental or licensing of property to a commonly controlled  
trade or business operated by an individual or a pass-through  
entity is considered a trade or business under section 199A.  
Services performed as an employee excluded from quali-  
fied trades or businesses. The trade or business of  
performing services as an employee isn’t a trade or business for  
Jan 9, 2024  
Cat. No. 69662S  
purposes of section 199A. Therefore, any amounts reported on  
Form W-2, box 1, other than amounts reported in box 1 if  
“Statutory Employee” on Form W-2, box 13, is checked, aren’t  
QBI. If you were previously an employee of a business and  
continue to provide substantially the same services to that  
business after you’re no longer treated as an employee, there is  
a presumption that you’re providing services as an employee for  
purposes of section 199A for the 3-year period after ceasing to  
be an employee. You can rebut this presumption on notice from  
the IRS by providing records such as contracts or partnership  
agreements that corroborate your status as a nonemployee.  
3. The trades or businesses meet at least two of the  
following factors:  
a. They provide products, property, or services that are the  
same or that are customarily offered together.  
b. They share facilities or share significant centralized  
business elements such as personnel, accounting, legal,  
manufacturing, purchasing, human resources, or information  
technology resources.  
c. They are operated in coordination with, or reliance on,  
one or more of the businesses in the aggregated group.  
For more information on if you’re an employee or an  
independent contractor, see Pub. 15-A, Employer’s  
Supplemental Tax Guide, and Pub. 1779, Independent  
Contractor or Employee.  
If a relevant pass-through entity (RPE) aggregates multiple  
trades or businesses, you may not separate the trades or  
businesses aggregated by the RPE, but you may add additional  
trades or businesses to the aggregation, if the rules above are  
met.  
If you choose to aggregate multiple trades or businesses,  
including or apart from any aggregations made by an RPE,  
complete Schedule B (Form 8995-A) before starting Part I of  
Form 8995-A. You must attach any RPE aggregation  
statement(s) to your Schedule B (Form 8995-A).  
If you’re not making an aggregation election and are therefore  
not required to file a Schedule B (Form 8995-A), attach your  
RPE’s aggregation statement(s) to your Form 8995-A.  
Your aggregations must be reported consistently for all  
subsequent years, unless there is a significant change in facts  
and circumstances that disqualify the aggregation.  
SSTBs excluded from your qualified trades or businesses.  
An SSTB is generally excluded from the definition of qualified  
trade or business.  
An SSTB is any trade or business providing services in the  
fields of:  
Health;  
Law;  
Accounting;  
Actuarial science;  
Performing arts;  
Consulting;  
Athletics;  
Financial services;  
Brokerage services;  
Investing and investment management;  
Trading or dealing in securities, partnership interests,  
Note. You must combine the QBI, W-2 wages, and Unadjusted  
Basis Immediately after Acquisition (UBIA) of qualified property  
for all aggregated trades or businesses, for purposes of applying  
the W-2 wages and UBIA of qualified property limits. However,  
these limits won’t apply until your income, before the QBI  
deduction, is more than the threshold. If your income is more  
than the threshold, you must use Form 8995-A.  
commodities; or  
Any trade or business where the principal asset is the  
reputation or skill of one or more of its employees or owners, as  
demonstrated by:  
–Receiving fees, compensation, or other income for  
Determining Your Qualified Business  
Income  
endorsing products or services;  
–Licensing or receiving fees, compensation or other income  
for the use of taxpayer’s image, likeness, name, signature,  
voice, trademark, or any other symbols associated with the  
individual’s identity; or  
Your QBI includes qualified items of income, gain, deduction,  
and loss from your trades or businesses that are effectively  
connected with the conduct of a trade or business in the United  
States. This includes qualified items from partnerships (other  
than PTPs), S corporations, sole proprietorships, and certain  
estates and trusts that are allowed in calculating your taxable  
income for the year.  
–Receiving fees, compensation, or other income for  
appearing at an event or on radio, television, or another  
media format.  
Exception 1: If your 2023 taxable income before the QBI  
deduction is less than or equal to $182,100 if single, head of  
household, qualifying surviving spouse, or are a trust or estate,  
or $364,200 if married filing jointly, your SSTB is treated as a  
qualified trade or business.  
To figure the total amount of QBI, you must consider all items  
that are attributable to the trade or business. This includes, but  
isn’t limited to, unreimbursed partnership expenses, business  
interest expense, deductible part of self-employment tax,  
self-employment health insurance deduction, and contributions  
to qualified retirement plans. QBI doesn’t include any of the  
following:  
Exception 2: If your taxable income before the QBI deduction  
is more than $182,100 but not more than $232,100 if single,  
head of household, qualifying surviving spouse, or are a trust or  
estate, and is more than $364,200 but not more than $464,200 if  
married filing jointly, an applicable percentage of your SSTB is  
treated as a qualified trade or business, you must complete  
Schedule A (Form 8995-A).  
Items that aren’t properly included in income.  
Income that isn’t effectively connected with the conduct of a  
trade or business within the United States (go to IRS.gov/ECI).  
Wage income (except “Statutory Employees” where Form  
Aggregation. If you’re engaged in more than one trade or  
business, each trade or business is a separate trade or business  
for purposes of section 199A. However, you may choose to  
aggregate multiple trades or businesses into a single trade or  
business for purposes of figuring your deduction, if you meet the  
following requirements.  
1. You or a group of persons directly or indirectly own 50%  
or more of each trade or business for the majority of the tax year,  
including the last day of the tax year, and all trades or  
businesses use the same tax year end;  
W-2, box 13, is checked).  
Amounts received as reasonable compensation from an S  
corporation.  
Amounts received as guaranteed payments.  
Amounts received as payments by a partner for services other  
than in a capacity as a partner.  
Items treated as capital gains or losses under any provision of  
the Internal Revenue Code (Code).  
Dividends and dividend equivalents.  
Interest income not properly allocable to a trade or business.  
Commodities transactions or foreign currency gains or losses.  
2. None of the trades or businesses are an SSTB; and  
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Instructions for Form 8995 (2023)  
 
Income, loss, or deductions from notional principal contracts.  
Annuities (unless received in connection with the trade or  
must look to how it’s reported on your federal income tax return.  
For example, ordinary business income or loss is generally  
included in QBI if it was used in computing your taxable income,  
not excluded, suspended, or disallowed under any other section  
of the Code. Also, a section 1231 gain or loss is only includible in  
QBI if it isn’t capital gain or loss. See the QBI Flow Chart, later, to  
figure if an item of income, gain, deduction, or loss is included in  
QBI.  
business).  
Qualified REIT dividends.  
Qualified PTP income.  
See the QBI Flow Chart, later, to figure if an item of income,  
gain, deduction, or loss is included in QBI.  
Losses or deductions from a qualified trade or business that  
are suspended by other provisions of the Internal Revenue Code  
are not qualified losses or deductions and, therefore, are not  
included in your QBI for the year. Such Code provisions include,  
but aren’t limited to, sections 163(j), 179, 461(l), 465, 469,  
704(d), and 1366(d). Instead, qualified losses and deductions  
are taken into account in the tax year they’re included in  
calculating your taxable income.  
Determining if information reported on your Form  
1099-PATR is included in QBI. The amounts reported to you  
as your share of patronage dividends and similar payments on  
Form 1099-PATR aren’t automatically included in your QBI.  
Payments may be included in QBI to the extent they are (1)  
related to your trade or business, (2) reported to you by the  
cooperative as qualified income items on an attachment to Form  
1099-PATR, and (3) not payments reported as from an SSTB,  
unless your taxable income is at or below the threshold, in which  
case payments from SSTBs are included in your QBI.  
When losses or deductions are suspended, you must  
determine the qualified portion of the losses or deductions that  
must be included in QBI in subsequent years when allowed in  
calculating your taxable income. In general, losses and  
deductions incurred prior to 2018 are not qualified losses or  
deductions and are not included in QBI in the year they are  
included in calculating taxable income.  
If you received qualified payments reported to you on Form  
1099-PATR from a specified agricultural or horticultural  
cooperative, you must reduce your QBI by the patron reduction  
and use Form 8995-A to compute your QBI deduction.  
Determining if items on Schedule C (Form 1040) are inclu-  
ded in QBI. The net gain or loss reported on your Schedule C  
(Form 1040) isn’t automatically included in your QBI. See the  
QBI Flow Chart, later, to figure if an item of income, gain,  
deduction, or loss is included in QBI.  
If a loss or deduction is partially suspended, only the portion  
of the allowed loss or deduction attributable to QBI must be  
considered when determining QBI from the trade or business in  
the year the loss or deduction is incurred. The portion of the  
allowed loss or deduction attributable to QBI is determined by  
first calculating the percentage of the total loss attributable to  
QBI by dividing the portion of the total loss attributable to QBI by  
the overall total loss. The allowed loss or deduction is then  
multiplied by this percentage to determine the portion of the  
allowed loss or deduction attributable to QBI.  
Determining Your Qualified REIT  
Dividends and Qualified PTP Income/  
Loss  
Qualified REIT dividends include any dividends you received  
from a REIT held for more than 45 days and for which the  
payment isn’t obligated to someone else and that isn’t a capital  
gain dividend or qualified dividend, plus your qualified REIT  
dividends received from a regulated investment company (RIC).  
This amount is reported to you on Form 1099-DIV, line 5.  
If your trade or business is an SSTB, whether the trade or  
business is a qualified trade or business is determined based on  
your taxable income in the year the loss or deduction is incurred.  
If your taxable income is within the phase-in range in that year,  
you must determine and apply the applicable percentage in the  
year the loss or deduction was incurred to determine the  
qualified portion of the suspended loss or deduction.  
Qualified PTP income or loss includes your share of qualified  
items of income, gain, deduction, and loss from a PTP that is not  
treated as a corporation for federal income tax purposes. It may  
also include gain or loss recognized on the disposition of your  
partnership interest that isn’t treated as a capital gain or loss.  
Losses and deductions retain their status as either qualified  
or non-qualified from year to year while suspended. Therefore,  
you must track each category of loss or deduction until the loss  
or deduction is no longer suspended. For an example of a  
reasonable method to track and compute the amount of  
previously disallowed losses or deductions to be included in your  
QBI deduction calculation in the year allowed, see Tracking  
Note. PTP income generated by an SSTB may be limited to the  
applicable percentage or excluded if your taxable income  
exceeds the threshold, in which case you may need to complete  
Part II of Schedule A (Form 8995-A). See the Instructions for  
Form 8995-A for more information.  
When losses or deductions from a PTP are suspended in the  
year incurred, you must determine the qualified portion of the  
losses or deductions that must be included as qualified PTP  
losses or deductions in subsequent years when allowed in  
calculating your taxable income. In general, losses and  
deductions that were incurred prior to 2018 are not qualified PTP  
losses or deductions and are not included in calculating taxable  
income.  
If your PTP is an SSTB, whether the PTP loss is a qualified  
loss is determined based on your taxable income in the year the  
loss or deduction is incurred. If your taxable income is within the  
phase-in range in that year, you must determine and apply the  
applicable percentage in the year the loss or deduction was  
incurred to determine the qualified portion of the suspended loss  
or deduction.  
When losses or deductions previously suspended by other  
Code provisions are allowed in calculating taxable income, the  
qualified portion of the loss or deduction allowed under each  
provision is treated as a qualified net loss carryforward from a  
separate trade or business when calculating the current year’s  
QBI deduction. See Line 3.  
Any qualified loss or deduction from an SSTB allowed in  
calculating taxable income isn’t included on the Schedule A  
(Form 8995-A) as the applicable percentage was previously  
determined and applied in the year the loss or deduction was  
incurred and should not be redetermined in the year the loss or  
deduction is allowed.  
Determining if items included on Schedule K-1 are inclu-  
ded in QBI. The amounts reported on your Schedule K-1 as  
“QBI/Qualified PTP Items Subject to Taxpayer-Specific  
Determinations” from a partnership, S corporation, estate, or  
trust aren’t automatically included in your QBI. To figure if the  
item of income, gain, deduction, or loss is included in QBI, you  
Losses and deductions retain their status as either qualified  
or non-qualified from year to year while suspended. Therefore,  
3
Instructions for Form 8995 (2023)  
you must track each loss or deduction from a PTP until the loss  
or deduction is no longer suspended.  
deductibility of the loss for purposes of any other provisions of  
the Code.  
When losses or deductions previously suspended by other  
Code provisions are allowed in calculating taxable income, the  
qualified portion of the loss or deduction allowed for each PTP is  
treated as a qualified net loss carryforward from a separate PTP  
when calculating the current year’s QBI deduction. See Line 7.  
Any qualified PTP loss or deduction from an SSTB allowed in  
calculating taxable income isn’t included on the Schedule A  
(Form 8995-A) as the applicable percentage was previously  
calculated and applied in the year the loss or deduction was  
incurred and should not be redetermined in the year the loss or  
deduction is allowed.  
Line 6  
Enter income as a positive number and losses as a negative  
number.  
Line 7  
Include here the qualified portion of PTP (loss) carryforward  
allowed in calculating taxable income in the current year, even if  
the loss was from a PTP that you no longer hold an interest in or  
is no longer in existence. Losses and deductions that remain  
suspended by other Code provisions are not qualified losses and  
deductions and must be tracked separately from any qualified  
trade or business losses for use when subsequently allowed in  
calculating taxable income.  
Specific Instructions  
Line 1  
If you aggregated multiple trades or businesses into a single  
business, enter the aggregation group name. For example,  
Aggregation 1, 2, 3, etc., instead of entering the business name,  
and leave line 1(b) blank.  
Line 8  
Any negative amount will be carried forward to the next year.  
This carryforward doesn’t affect the deductibility of the loss for  
purposes of any other provisions of the Code.  
Line 11  
Note. If you aggregated trades or businesses, you must attach  
Schedule B (Form 8995-A) or similar schedule.  
Enter your taxable income figured before any QBI deduction,  
computed as follows.  
If you’re relying on the safe harbor contained in Rev. Proc.  
2019-38, enter each enterprise as identified on the statement  
required for use on the safe harbor. For example, Enterprise 1, 2,  
3, etc.  
Form 1040, 1040-SR, or 1040-NR filers: Form 1040,  
1040-SR, or 1040-NR, line 11, minus Form 1040, 1040-SR, or  
1040-NR, line 12.  
Form 1041 filers: Form 1041, line 23, plus Form 1041, line 20.  
Form 1041-N filers: Form 1041-N, line 13, plus qualified  
Enter on line 1(b) the employer identification number (EIN). If  
you don’t have an EIN, enter your social security number (SSN)  
or individual taxpayer identification number (ITIN). If you’re the  
sole owner of an LLC that isn’t treated as a separate entity for  
federal income tax purposes, enter the EIN given to the LLC. If  
you don’t have an EIN, enter the owner's name and tax  
identification number.  
income deduction reported on Form 1041-N, line 9.  
Form 990-T filers: Form 990-T, Part I, line 11, plus Form 990-T,  
Part I, line 9.  
S-corporation portion of ESBT filers: ESBT Tax Worksheet,  
line 13, plus ESBT Tax Worksheet, line 11.  
Line 12  
Enter on line 1(c) the net qualified business income or (loss)  
for the trade, business, or aggregation reported in the  
corresponding row. Do not include here any losses or deductions  
suspended from use in calculating taxable income in the current  
year or any portion of qualified losses or deductions previously  
suspended by other Code provisions that are allowed in  
calculating taxable income in the current year. For qualified  
business net (loss) carryforward from the prior year, see  
instructions for line 3.  
Enter the amount from your tax return as follows.  
Form 1040, 1040-SR, or 1040-NR, line 3a, plus your net  
capital gain. If you’re not required to file Schedule D (Form  
1040), your net capital gain is the amount reported on Form  
1040, 1040-SR, or 1040-NR, line 7. If you file Schedule D (Form  
1040), your net capital gain is the smaller of Schedule D (Form  
1040), line 15 or 16, unless line 15 or 16 is zero or less, in which  
case nothing is added to the qualified dividends.  
Form 1041, line 2b(2), plus your net capital gain. For estates  
or trusts required to file Schedule D (Form 1041), add the  
qualified dividends to the smaller of Schedule D (Form 1041),  
line 18a(2), or line 19(2), unless either line 18a(2) or 19(2) is zero  
or less, in which case nothing is added to the qualified dividends.  
Line 2  
If you have more than five trades or businesses, attach a  
statement with the name and taxpayer identification number of  
the trade(s) or business(es) and include the income and loss  
from those trade(s) or business(es) in the total for line 2.  
Form 1041-N, line 2b, plus the smaller of Form 1041-N,  
Schedule D, line 10 or 11, unless line 10 or 11 is zero or less, in  
which case nothing is added to the qualified dividends.  
Line 3  
Form 990-T filers who are trusts, Schedule D (Form 1041), the  
Include here the qualified portion of trade or business (loss)  
carryforward allowed in calculating taxable income in the current  
year, even if the loss was from a trade or business that is no  
by Other Provisions, later. Losses and deductions that remain  
suspended by other Code provisions are not qualified losses and  
deductions and must be tracked separately for use when  
subsequently allowed in calculating taxable income.  
smaller of line 18a(2) or 19(2), unless either line 18a(2) or 19(2)  
is zero or less, in which case the net capital gain for purposes of  
section 199A is zero.  
S-corporation portion of an ESBT, your ESBT Tax Worksheet,  
line 2b, plus the smaller of your ESBT’s Schedule D (Form  
1041), line 18a(2) or 19(2) is zero or less, in which case nothing  
is added to your qualified dividends.  
Line 15  
Enter this amount on your Form 1040 or 1040-SR, line 13; Form  
1040-NR, line 13a; Form 1041, line 20; Form 1041-N, line 9;  
Form 990-T, line 9; and S-corporation portion of an ESBT,  
line 11.  
Line 4  
If you have a qualified business net loss for the year, you don’t  
qualify for the QBI deduction unless you have qualified REIT  
dividends or qualified PTP income. The loss will be carried  
forward to next year. This carryforward doesn’t affect the  
4
Instructions for Form 8995 (2023)  
   
later tax years regardless of whether the qualified PTP(s) that  
generated the loss is still in existence. This carryforward doesn’t  
affect the deductibility of any loss for purposes of any other  
provisions of the Code.  
Line 16  
This is the amount to be carried forward to the next year. This  
amount will offset QBI in later tax years regardless of whether  
the trade(s) or business(es) that generated the loss is still in  
existence. This carryforward doesn’t affect the deductibility of  
any loss for purposes of any other provisions of the Code.  
Line 17  
This amount must be carried forward to next year. This amount  
will offset qualified REIT dividends and qualified PTP income in  
5
Instructions for Form 8995 (2023)  
QBI Flow Chart  
Figure 1. Use this chart to determine if an item of income, gain, deduction, or loss is included in QBI.  
No  
1. Is the item effectively connected with the conduct of a trade  
or business within the U.S.?  
Yes  
2. Is the item from a trade or business (this includes general  
business income and deduction items as well as deductible tax on  
self-employment income, self-employed health insurance,  
contributions to qualiꢀed retirement plans, unreimbursed  
partnership expenses, interest expenses for the purchase of the  
partnership/S corporation interest/stock)?  
No  
Yes  
3. If the item is from a pass-through entity (partnership, S  
corporation, or trust) and the character of the item can’t be  
determined at the entity level (section 1231 gains/losses, involuntary  
conversions, interest from debt ꢀnanced distributions, etc.), did you  
determine the item to be ordinary (not capital or personal)? Note: If  
the item isn’t from a pass-through entity and it doesn’t require a  
determination at the investor level, skip this test.  
No  
No  
Yes  
4. Is the item included in ꢀguring your taxable income? Items  
disallowed or limited, including the basis, at-risk, passive loss, or  
excess business loss rules, aren’t included in QBI until the year  
included in taxable income.  
Yes  
5. Is the item treated as a capital gain (loss) or dividend/dividend  
equivalent?  
Yes  
Yes  
No  
6. Is the item interest income other than interest income allocable to  
a trade or business? Note: Interest income from an investment of  
working capital, reserves, or similar accounts isn’t allocable to a  
trade or business.  
No  
Yes  
Yes  
7. Is the item an annuity, other than an annuity received in  
connection with the trade or business?  
No  
8. Is the item a commodities transaction, foreign currency gain (loss)  
described in section 954(c)(1)(C) or (D), or from a notional principal  
contract under section 954(c)(1)(F)?  
No  
9. Is the item qualiꢀed PTP income (loss)? If “Yes,” it’s not QBI, but  
it’s included in the REIT/PTP component of the QBI computation.  
Include this item as a qualiꢀed item of income, gain, deduction, or  
loss from a PTP.  
Yes  
Yes  
No  
This item isn’t QBI.  
10. Is the item W-2 wage income (except “Statutory Employees”  
where Form W-2, box 13, is checked)?  
No  
See Figure 2, QBI Flow  
Chart (continued).  
6
Instructions for Form 8995 (2023)  
QBI Flow Chart (continued)  
Figure 2. Use this chart to determine if an item of income, gain, deduction, or loss is included in QBI.  
11. Is the item an amount received for reasonable compensation  
from an S corporation, an amount received as a guaranteed  
payment, or a payment received for services other than in a capacity  
as a partner under section 707(a)?  
Yes  
No  
No  
12. Is the item related to an SSTB?  
Yes  
Yes  
13. Is your taxable income at or below the threshold?  
No  
14. Is your taxable income above the threshold and within the  
phase-in range? If “Yes,” this item is partially includible in QBI. Use  
Form 8995-A, instead, and complete Schedule A (Form 8995-A).  
Yes  
This item isn’t QBI.  
This item is QBI.  
No  
7
Instructions for Form 8995 (2023)  
1. For the allocation to QBI, multiply the remaining losses  
(after Step 1), up to the total suspended losses reported in  
column A, row 2, by column B, row 2, and enter this amount in  
column J, row 2.  
2. For the allocation to Non-QBI, multiply the remaining  
losses (after Step 1), up to the total suspended losses reported  
in column A, row 2, by 100% less the amount in column B, row 2,  
and add it to any amount already included in column F, row 2.  
Tracking Losses or Deductions  
Suspended by Other Provisions  
A worksheet, QBI Loss Tracking Worksheet, is provided  
below that can help you track your suspended losses.  
!
CAUTION  
Losses and deductions that would be properly includible  
in QBI, if such loss or deduction wasn't suspended (excluded  
from taxable income) by other provisions, must be tracked  
separately for purposes of determining the future amount  
includible as negative QBI. Use as many copies of the worksheet  
as necessary to separately track your suspended loss(es) under  
each suspending provision.  
Step 3. See the instructions for columns G, K, H, and L for rows  
1 and 2.  
Prior Year Suspended Losses Allowed in 2019  
Note. If column C, row 3, is zero, skip Step 4 through Step 6.  
Specific Instructions  
Step 4. Allocate prior year suspended losses allowed from  
column C, row 3, up to the remaining suspended losses reported  
in column H, row 1, to column F, row 3.  
Note. All losses should be entered as a negative number on the  
worksheet.  
Column A. Total suspended losses in year of disallowance.  
For rows 1 through 7, enter your suspended losses by year  
starting with any pre-2018 losses. Additional rows can be added  
as needed in future years. Allocate these losses between  
Non-QBI and QBI in columns E and I. See below.  
Step 5. If there are any prior year suspended losses allowed  
remaining from column C, row 3, after Step 4, allocate the  
remaining prior year suspended losses allowed between QBI  
and Non-QBI using the FIFO method until each year's loss has  
been reduced to zero.  
1. For the allocation to QBI, multiply the remaining losses  
(after Step 4), up to the sum of the remaining suspended losses  
reported in column H, row 2, and column L, row 2, by column B,  
row 2, and enter this amount in column J, row 3.  
2. For the allocation to Non-QBI, multiply the remaining  
losses (after Step 4), up to the sum of the remaining suspended  
losses reported in column H, row 2, and column L, row 2, by  
100% less the amount in column B, row 2, and add it to any  
amount already included in column F, row 3.  
Note. All pre-2018 losses are allocable to Non-QBI.  
Column E. Non-QBI suspended losses. For rows 1 through 7,  
enter suspended losses allocable to Non-QBI into the  
appropriate year row (for example, row 1, pre-2018; row 2, 2018;  
row 3, 2019, etc.).  
Column I. QBI suspended losses. For rows 2 through 7, enter  
suspended losses allocable to QBI into the appropriate year row  
(for example, row 2, 2018; row 3, 2019, etc.).  
3. If any prior year suspended losses allowed remain from  
column C, row 3, after Steps 5(a) and (b), multiply the remaining  
losses (after Steps 5(a) and (b)), up to the sum of the remaining  
suspended losses reported in column H, row 3, and column L,  
row 3, by column B, row 3, and add it to any amount already  
included in column J, row 3.  
4. Then, multiply the remaining losses (after Steps 5(a) and  
(b)), up to the sum of the remaining suspended losses reported  
in column H, row 3, and column L, row 3, by 100% less the  
amount in column B, row 3, and add it to any amount already  
included in column F, row 3.  
Column B. QBI fixed percentage. Divide column I by column  
A for each year and enter the percentage in the corresponding  
year row.  
Column C. Prior year suspended losses allowed. For rows 2  
through 7, enter any prior year suspended losses allowed in the  
corresponding row for the year allowed.  
Note. The total prior year suspended losses allowed entered in  
column C, row 8, can't exceed the total amount entered in  
column A, row 8.  
Column F. Non-QBI allocated prior year suspended losses  
allowed and column J, QBI allocated prior year suspended  
loses allowed. When allocating prior year suspended losses  
allowed (column C) between Non-QBI (column F) and QBI  
(column J), the First-In-First-Out (FIFO) method must be used.  
To apply this rule, prior year suspended losses allowed must first  
be allocated to any losses suspended from 2017 and earlier,  
until the pre-2018 loss (row 1) are exhausted. All prior year  
suspended losses allowed allocated to pre-2018 years are  
Non-QBI. Once all pre-2018 losses have been used, losses will  
be allocated based on the QBI Fixed Percentage in column B for  
each subsequent year in which losses were suspended.  
Step 6. See the instructions for columns G, K, H, and L for rows  
1 through 3.  
Prior Year Suspended Losses Allowed in 2020 and  
Beyond  
Repeat Step 4 through Step 6 and adjust as necessary for any  
prior year suspended losses allowed in column C, row 4, and  
each row thereafter, as applicable.  
Additional year rows and columns may be added as needed  
in future years.  
Prior Year Suspended Losses Allowed in 2018  
Note. If column C, row 2, is zero, skip Step 1 through Step 3.  
Step 1. Allocate prior year suspended losses allowed from  
column C, row 2, up to the total suspended losses reported in  
column A, row 1, to column F, row 2.  
Columns G and K. Utilized “20XX. Use these columns to  
show how the allocated prior year suspended losses allowed in  
columns F and J are utilized each year. For example, the loss  
reported in column F for row 2 must tie to the amount reported in  
column G(i), row 8; and the loss reported in column F for row 3  
must tie to the amount reported in column G(ii), row 8, etc.  
Step 2. If there are any prior year suspended losses allowed  
remaining from column C, row 2, after Step 1, allocate the  
remaining prior year suspended losses allowed between QBI  
and Non-QBI.  
Column H. Remaining suspended losses. For each row, take  
the amount in column E less the amounts utilized in all columns  
G(i) through G(vi). This amount can't be more than zero.  
8
Instructions for Form 8995 (2023)  
 
row. Take column K(i), row 8, divided by the sum of column K(i),  
row 8, plus column G(i), row 8, multiplied by column D, row 2,  
and enter this amount in column K(i), row 9. Written as a formula:  
column K(i), row 9 = column D, row 2 x (column K(i), row 8 ÷  
(column K(i), row 8 + column G(i), row 8)).  
Next, compute the amount for Non-QBI for the 2018 row. Take  
column G(i), row 8, divided by the sum of column G(i), row 8 +  
column K(i), row 8, multiplied by column D, row 2, and enter this  
amount in column G(i), row 9. Written as a formula: column K(i),  
row 9 = column D, row 2 x (column G(i), row 8 ÷ (column G(i),  
row 8 + column K(i), row 8)).  
Continue the computation for columns K(ii) and G(ii) through  
K(vi) and G(vi), multiply the percentage times the amount in  
column D, row 3, for 2019; column D, row 4, for 2020; column D,  
row 5, for 2021, column D, row 6, for 2022; and column D, row 7,  
for 2023, respectively.  
Column L. Remaining suspended losses. For each row, take  
the amount in column I less the amounts utilized in all columns  
K(i) through K(vi). This amount can't be more than zero.  
Column D. Allowed losses limited by other Code sections.  
When a prior year suspended loss allowed under one Code  
section is subsequently limited by another Code section, this  
loss shouldn't be included in the QBI calculation until the loss is  
allowed in the computation of taxable income. Instead, that loss  
is added to the total suspended losses in the year of  
disallowance under the new limiting Code section for  
continuation of its suspension. This column along with row 9  
addresses how to account for such losses.  
In column D, enter the amount of any prior year suspended  
losses allowed under this Code section, but subsequently  
disallowed under another Code section on the row for the year  
the loss was allowed under this Code section. These amounts  
will be allocated between Non-QBI and QBI in columns G and K  
for the corresponding year. See row 9 below.  
Row 10. Total prior year suspended losses allowed that  
must be included in QBI. The amounts reported in columns  
K(i) through K(vi) for row 10 equals the loss amount that must be  
included in your current year QBI, respectively for each year, as  
a loss from a separate trade or business.  
Row 9. Allocation of allowed losses limited by other Code  
sections. To allocate the allowed losses limited by other Code  
sections between QBI and Non-QBI, start with QBI for the 2018  
9
Instructions for Form 8995 (2023)  
Keep for Your Records  
QBI Loss Tracking Worksheet  
Use this worksheet to track losses or deductions suspended by other provisions and attributable to QBI using the FIFO method.  
Code  
[Enter the Code section limiting your loss]  
Part I  
Suspended & Allowed Losses  
A. Total suspended  
losses in year  
of disallowance  
B. QBI fixed percentage  
C. Prior year  
suspended  
losses allowed  
D. Allowed losses  
limited by other  
Code sections  
0.00 %  
%
1. Pre-2018  
2.  
3.  
4.  
5.  
6.  
7.  
8.  
2018  
2019  
2020  
2021  
2022  
2023  
Total  
%
%
%
%
%
Part II Non-QBI Suspended and Allowed Losses  
Allocable to Non-QBI  
F. Allocated  
E.  
G(i).  
Utilized  
2018  
G(ii).  
Utilized  
2019  
G(iii).  
Utilized  
2020  
G(iv).  
Utilized  
2021  
G(v).  
Utilized  
2022  
G(vi).  
Utilized  
2023  
H. Remaining  
suspended  
losses  
prior year  
suspended  
losses allowed  
Suspended  
losses  
1.  
2.  
3.  
4.  
5.  
6.  
7.  
8.  
Pre-2018  
2018  
2019  
2020  
2021  
2022  
2023  
Total  
9. Allocation of allowed losses limited by  
other Code sections .  
.
.
.
.
.
Part III QBI Suspended and Allowed Losses  
Allocable to QBI  
J. Allocated  
I.  
K(i).  
Utilized  
2018  
K(ii).  
Utilized  
2019  
K(iii).  
Utilized  
2020  
K(iv).  
Utilized  
2021  
K(v).  
Utilized  
2022  
K(vi).  
Utilized  
2023  
L. Remaining  
suspended  
losses  
prior year  
suspended  
losses allowed  
Suspended  
losses  
1.  
2.  
3.  
4.  
5.  
6.  
7.  
8.  
Pre-2018  
2018  
2019  
2020  
2021  
2022  
2023  
Total  
9. Allocation of allowed losses limited by  
other Code sections .  
.
.
.
.
.
10.  
Total prior year suspended losses  
allowed that must be included in QBI .  
10  
Instructions for Form 8995 (2023)  
Paperwork Reduction Act Notice We ask for the information on this form to carry out the Internal Revenue laws of the United States.  
You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and  
collect the right amount of tax.  
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form  
displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents  
may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential,  
as required by section 6103.  
The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden for business  
taxpayers filing this form is approved under OMB control number 1545-0123 and is included in the estimates shown in the instructions  
for their business income tax returns. The estimated burden for all other taxpayers who file this form is shown below:  
Form  
Recordkeeping  
Learning  
Preparing, copying, assembling, and  
sending  
8995  
8995-A  
Schedule A (8995-A)  
Schedule B (8995-A)  
Schedule C (8995-A)  
Schedule D (8995-A)  
4 hr., 43 min.  
7 hr., 52 min.  
3 hr., 16 min.  
1 hr., 34 min.  
1 hr., 19 min.  
1 hr., 5 min.  
51 min.  
1 hr., 53 min.  
7 min.  
7 min.  
2 hr., 6 min.  
6 hr., 6 min.  
1 hr., 15 min.  
20 min.  
50 min.  
47 min.  
16 min.  
11  
Instructions for Form 8995 (2023)