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QBI with 2 scorp - SSTB and non-SSTB

Level 1


Really trying to get a sanity check on the QBI rules. When you have 2 s-corp, one with loss and one with gain, the company with loss will offset and limit the QBI of the one with gain. (assume we can't aggregate).

We are assuming the net income is above all thresholds.

But if instead the company with a loss is SSTB, then the tax software shows it does NOT count against the QBI. So if you know one company will always generate a loss, it seems pretty clear that you WANT to have an SSTB. Meaning that if you have a business (like taking pictures) that arguably is based upon the skill of the principal, you prefer to be an SSTB. 

Kinda backwards since we are trying to avoid a loss minimizing the QBI, but that's what the software shows. Seem right to anyone else?



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Level 14
Level 14

You don't have a choice. Each company either is or is not an SSTB, and each will issue a K1 accordingly