I have 199a dividend from 1099-DIV from REIT, but do not have a business. Does a deduction apply, can it be calculated in TTdeluxe, and where is it reported and entered?

[DanielV01 · Accepted solution]

You have a couple of separate questions regarding the REIT dividends.  I'll try to answer them separately:

• Does a deduction apply to REIT dividends?  It can, yes.  Although not considered to be QBI itself, REIT dividends are included with QBI for the Section 199A deduction.  Even if you have no separate business, they can be considered for the deduction.

• Can it be calculated in TTDeluxe (online)?  You can always start using TurboTax Deluxe.  It is possible that if the dividends are the only Section 199A eligible income you are reporting, that an upgrade is not necessary.  If it is necessary to upgrade to report the dividends and get the deduction, TurboTax will advise you if you will need to use TurboTax Premier or not.  On the other hand, you may use any version of TurboTax Desktop software for QBI calculations (and Forms Mode in desktop software allows you to see where QBI goes on the return).  

• Where is it entered?  You will report it with the remaining information on your Form 1099-DIV.  Type "1099-DIV" and then the "Jump to" link provided.  On the 1099-DIV form, you will see limited selections of boxes, so you will click the checkbox "My form has info in more than just these boxes (this is uncommon)".  Then you will enter the box 5 information.  You will later be asked some questions to ensure that this income qualifies for Section 199A deduction on your return.

[dazed---confused]

How does TurboTax process this information? That is to say, I haven't found where this number shows up on the 1040 or supplemental forms other than the 1099-div.

[DanielV01]

If you qualify for the 199A deduction, it shows up on Form 1040, Line 9

[lula20192019]

From reading the instructions associated with this deduction, it is subject to income limitations, and completely phases-out about $415,000 MFJ taxable income.  Is this same limitation applicable to REIT dividends from section 199A or only to the Qualified Business Income (which REIT dividends are not part of)?  Turbo Tax is not phasing out/eliminating the deduction based on these income limitations for the REIT dividends, so I am inclined to believe the income limitations do not apply to REIT dividends, but want to confirm because I found the IRS pub 535 instructions lengthy and confusing.  Want to be sure Turbo Tax is calculating correctly!  Thank you in advance!

[tgeliot]

Daniel:  You are the expert here and I am not, but I am going to challenge you on this anyway.  Are you really sure this should show up on line 9 ("Standard deduction or itemized deduction") and not on line 10 ("Qualified business income deduction")?  Line 10 is all about the Qualified Business Income Deduction and form 8995, which is where I would think one would report 199a anything.

Thank you for your patience

[DavidS127]

DanielV01's answer was from last year for tax year 2018, when the QBI deduction was on line 9 of Form 1040.  The Form 1040 changed from 2018 to 2019, and you are correct: for 2019 the QBI deduction is now on line 10 of Form 1040.

[ysiad]

Hello, I have a similar question as to the one posed in this message (the message from Lula). Any insights from the community? Thanks.

[tgeliot]

Ah, right, I see now that it's dated June 2019.