199a ATX Worksheet

[Dan]

Question:  I have another question concerning the 199a  ATX Worksheet.  The question is this:  If you have a gain on form 4797 part II does that mean you add that amount to the amount you have on schedule F and subtract from that total the amount you have on schedule SE line 6 which is 1/2 of your self-employment tax?

For example:

Farm Income is (Schedule F-line 34):                     $73,947

Sales of Business Property (Form 4797, Part II):  $34,832

Minus amount on Schedule SE line 6:                     $  3,936

Total to include as Qualified Business Income:  $104,843

Is the above information correct or am I missing something?  Does the worksheet have a place to enter the amount of business property sales from Form 4797, part ii?  Or do you just add it like I have done with the income from schedule F?  Thanks for your early response.

[TAXMAN]

So far that's the way I been doing it. I print out the worksheet and put the #'s on it for my personal record as to where the # came from. Just don't forget if there is health insurance involved.

[Dan]

Thanks Taxman!

I also read an article from Stalcup Ag Service about the 199a deduction.  It mentions:  "If you are the operator of a farm operation reporting your income on schedule F, your farm profit is QBI.  This is a pretty clear case."  It also says:  "If you sale farm equipment as an operating farmer the sale of farm equipment reported on Form 4797 as ordinary income will qualify as QBI."   Thanks for sharing the health insurance involvement in this.

[grandmabee]

I have  2 rental properties.  one has a loss and one is a gain.  I net them together.  But one sold at gain this year.  I have 4797 part 1 and part 3.  all ends up on the schedule D with some 1250.  does this gain go into the calculation of the QBI?  I can't see where I would add it to the worksheet?  but I don't see where you add the 4797 part 2 to the worksheet either so I must be missing something.  thanks for any help.

[jasdlm]

On 3/3/2019 at 1:01 PM, grandmabee said:

I have  2 rental properties.  one has a loss and one is a gain.  I net them together.  But one sold at gain this year.  I have 4797 part 1 and part 3.  all ends up on the schedule D with some 1250.  does this gain go into the calculation of the QBI?  I can't see where I would add it to the worksheet?  but I don't see where you add the 4797 part 2 to the worksheet either so I must be missing something.  thanks for any help.

What did you end up doing with this?  I have an LLC that owns several rentals and sold one for a substantial gain.  I have been researching for quite some time and can't find an answer that feels definitive.

[joanmcq]

Ordinary income= QBI, capital gain doesn't and is subtracted from taxable income for one of the limitations.  I don't have one of these, so I don't know how ATX is handling it.  You may have to add the 1250 recapture to the activity's income manually.