Guidance Issued on Calculating and Reporting the QBI Deduction for Tax-Exempt Trusts

May 31, 2019

The IRS has issued guidance to tax-exempt trusts with unrelated business income, which claim the §199A Qualified Business Income (QBI) deduction. The guidance explains where trusts filing Form 990-T with unrelated business income are to report the QBI deduction and states that QBI does not include items of income, gain, deduction, and loss from any unrelated business that operated at a loss.

The QBI deduction is added to any allowable specific deduction, and the total amount is then reported on line 37: Specific Deduction. The trust must also attach a statement to the return indicating the QBI deduction amount claimed on line 37.

For additional information relating to the calculation and reporting of the QBI deduction on trust tax returns, please contact John Ure or one of our experienced tax advisors at 301.231.6200.