Formularz 8995 Instrukcje
Instrukcje dotyczące formularza 8995, Uproszczone odliczanie dochodu z działalności gospodarczej
Rev. 2023 r
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- Formularz 8995 - Kwalifikowane odliczenie dochodu z działalności
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
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
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income or loss (all defined later); and
Your 2023 taxable income before your QBI deduction is less
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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
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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;
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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
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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.
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Income that isn’t effectively connected with the conduct of a
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Wage income (except “Statutory Employees” where Form
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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
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corporation.
Amounts received as guaranteed payments.
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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
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the Internal Revenue Code (Code).
Dividends and dividend equivalents.
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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.
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business).
Qualified REIT dividends.
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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
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
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,
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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
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,
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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
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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.
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income deduction reported on Form 1041-N, line 9.
Form 990-T filers: Form 990-T, Part I, line 11, plus Form 990-T,
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Part I, line 9.
S-corporation portion of ESBT filers: ESBT Tax Worksheet,
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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
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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
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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,
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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
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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,
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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
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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
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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).
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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
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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 .
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Instructions for Form 8995 (2023)
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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.
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Instructions for Form 8995 (2023)