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Level 3
July 30, 2020
Solved

S Corp K-1 and QBI calculation for Code V

I have two 50/50 shareholders and only one took compensation.  There are no distributions and there is a loss for the year 2019.  What should the K-1's look like for Statement A Qualified Business Income, Box 17, Code V?

Currently it is showing the loss split 50/50, with W-2 wages split 50/50 and the qualified property is split 50/50.  Is this correct?  it is not a specified trade or business.  This is my first S Corp in a few years and I am not sure I am understanding how the shareholder comp should show up for Qualified Business Income as I am reading that it should be excluded from Qualified Business Income but only one shareholder took compensation.  I appreciate your help.

 

   

 

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IRonMaN
IRonMaNAnswer
Level 15
July 31, 2020

Just let the software do its thing and don't try to adjust anything.

Slava Ukraini!

7 replies

IRonMaN
Level 15
July 30, 2020

50/50 sounds about 100% right.  Wages for QBI are total wages, not individual shareholder wages.

Slava Ukraini!
Sheri1Author
Level 3
July 30, 2020

I also read though that Shareholder reasonable compensation are not QBI wages, so do I take the amount off of the Statement A of K-1?