Help Understanding Why Form 8995-A and Schedule C Are Generating in ProConnect

[workhard2022]

Hello everyone,

I’m preparing an individual tax return using ProConnect, and I noticed that the software is generating two pages related to the Qualified Business Income deduction:

1. Form 8995-A, and

2. Form 8995-A, Schedule C.

In my prior experience, I’ve only seen the simpler Form 8995 used, so I’m unsure whether these forms are appropriate for this taxpayer’s situation.

Some Background of this taxpayer:

• The taxpayer is a Virginia resident.

• He has W-2 wages and some Form 1099-INT income.

• He also received six K-1s:

  • Five from partnerships

  • One from an S corporation

Here are the Box 1 amounts from the K-1s:

1. Partnership A – $12,000

2. Partnership B – $32,000

3. Partnership C – $42,000

4. Partnership D – $30,000

5. Partnership E – box1: $(28,000) (loss)

6. S corporation –box1:  $230,000

I’m trying to understand whether Form 8995-A and especially Schedule C are necessary in this case. I checked with ChatGPT, and it indicated that Schedule C of Form 8995-A is specifically required for income from Publicly Traded Partnerships (PTPs). However, I haven’t been able to confirm this directly from IRS instructions.

As far as I can tell, none of these partnerships are PTPs, but I wanted to double-check in case I’m missing something.

Any guidance on why ProConnect is generating these forms—and whether they’re actually needed—would be greatly appreciated.

[BobKamman · Accepted solution]

Sometimes it is safer to read the IRS instructions, than to rely on Artificial Imagination Intelligence:

If any of your trades, businesses, or aggregations have a qualified business loss for the current year or you have a qualified business net loss carryforward from prior years, you must complete Schedule C (Form 8995-A) before starting Form 8995-A, Part I. This includes prior year loss carryforwards even if the loss was unreported or the trade or business that generated the loss is no longer in existence.

Schedule C (Form 8995-A) offsets your trade or business that generated a qualified business loss against the QBI from your other trades or businesses. The qualified business loss must be apportioned among all your trades or businesses with QBI in proportion to their QBI.