Guaranteed Payments and QBI - Client has me second-guessing myself

[jasdlm]

Client insists her GP income should be flagged on the partnership return I prepared as QBI eligible.  Says her account is saying she's losing money over this.  I even found the section on the IRS website that says 'No GPs', but I'm feeling like I'm missing something.  Just need a little hand-holding/reassurance or a swift kick in the back side.

 

Thanks.

[jklcpa]

You are correct. No GPs.

[Lee B]

The Tax Advisor:

 

"Sec. 199A(c)(4)(B) provides that QBI does not include any guaranteed payments to a partner for services rendered to the partnership's trade or business. Furthermore, the guaranteed payment deduction reduces the amount of income otherwise eligible for the QBI deduction, and the guaranteed payments are not treated as W-2 wages for the partnership's calculation of wage-based limits under Sec. 199A. Taking all three of these changes together makes the usefulness of guaranteed payments minimal and potentially harmfuL"

[Slippery Pencil]

6 hours ago, cbslee said:

usefulness of guaranteed payments minimal and potentially harmful

Thus her accountant is correct, she is losing money over this; but it's because of her & her partners boneheaded business decisions, not you telling her the consequences of her actions.