Question 12 of 75.

When preparing Form 1065, U.S. Return of Partnership Income, what entries must be made in order for the partners to claim the qualified business income (QBI) deduction?

The appropriate QBI adjustments must be made on the partnership's balance sheet and reported correctly on page 5 of Form 1065.

Each partner's Schedule K-1 (Form 1065) should report the amount of their QBI deduction in Part III, box 13, Other deductions.

The information each partner will need to calculate their share of the QBI deduction should be reported on their Schedule K-1 (Form 1065), box 20, Other information, using Code Z, and an attached statement.

The QBI deduction will reduce the amount of the partnership's ordinary business income and must be included in total deductions reported on page 1 of Form 1065.