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How To Aggregate Businesses Under Section 1.199A-4

by Intuit• Updated 3 months ago

This article will help you link business income to show an aggregation of business operations as discussed in Section 1.199A-4 and generate an explanatory statement.

Input Details

ProConnect Tax Online will aggregate all businesses for which you enter the same Aggregate Tax Identification Number. You only need to enter the explanation of aggregation on one of the linked activities in order to generate the required statement. Click on an income type below to learn how to aggregate it.

  1. Go to Income > Business Income (Sch C).
  2. On the left-side menu, select Qualified Business Income Deduction.
  3. Enter the Aggregate Tax Identification Number.
  4. Enter the Description of aggregated businesses and explanation of how they are allowed to be aggregated (only required on one business in each aggregation).
  1. Go to Income > Rental and Royalty Income (Sch E).
  2. On the left-side menu, select Qualified Business Income Deduction.
  3. Enter the Aggregate Tax Identification Number.
  4. Enter the Description of aggregated businesses and explanation of how they are allowed to be aggregated (only required on one business in each aggregation).

Note: To claim safe harbor on a rental real estate aggregation, only check the box Claiming safe harbor on rental real estate per IRS Notice 2019-07 on one Sch E activity. On all other Sch E activities, enter 1 in Business is a qualified trade or business: 1=yes, 2=no [Override]. This will prevent the program from generating multiple safe harbor statements for the aggregation, while still ensuring all activities are included in the QBI calculation.

  1. Go to Income > Farm Income (Sch F / 4835).
  2. On the left-side menu, select Qualified Business Income Deduction.
  3. Enter the Aggregate Tax Identification Number.
  4. Enter the Description of aggregated businesses and explanation of how they are allowed to be aggregated (only required on one business in each aggregation).
  1. Go to Income > Partnership Info (1065 K-1).
  2. On the left-side menu, select Line 20 - Other.
  3. Scroll down to the Section 199A (20Z - 20AB) subsection.
  4. Enter the Aggregate Tax Identification Number.
  5. Enter the Explanation of aggregation (only required on one business in each aggregation).
  1. Go to Income > S-Corp Info (1120S K-1).
  2. On the left-side menu, select Line 17 - Other Information.
  3. Scroll down to the Section 199A (17V - 17X) subsection.
  4. Enter the Aggregate Tax Identification Number.
  5. Enter the Explanation of aggregation (only required on one business in each aggregation).
  1. Go to Income > Estate or Trust Info (1041 K-1).
  2. On the left-side menu, select Line 14 - Other Information.
  3. Scroll down to the Section 199A (14I) subsection.
  4. Enter the Aggregate Tax Identification Number.
  5. Enter the Explanation of aggregation (only required on one business in each aggregation).

Results

Once you complete the input, ProConnect Tax Online will generate a worksheet titled Schedule B - Aggregation of Business Operations. Each aggregation will be listed separately, if you have entered multiple aggregate business numbers. Like all worksheets, this will not be automatically e-filed with the tax return, and must be attached as a PDF.

Image of Tax Online Individual Worksheet - Schedule B - Aggregation of Business Operations

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