What this line means
The net REIT/PTP loss carried forward from last year’s tax return. If your combined REIT dividends and PTP income were negative in a prior year, that loss carries forward to reduce this year’s REIT/PTP income. Enter the amount from last year’s Form 8995 line 18 as a negative number. 1
Does this apply to you?
- You filed Form 8995 last year and line 18 showed a negative REIT/PTP carryforward amount
- Your PTP losses exceeded your REIT dividends and PTP income in a prior year
- You had net losses from a publicly traded partnership that created negative REIT/PTP income in a prior year
- You are filing Form 8995 for the first time or had no prior-year REIT/PTP loss (enter zero)
Easy to overlook
REIT/PTP losses carry forward separately from QBI losses The QBI loss carryforward on line 2 and the REIT/PTP loss carryforward on this line are tracked independently. A QBI loss does not reduce REIT/PTP income, and a REIT/PTP loss does not reduce QBI. Each pool has its own carryforward bucket. Mixing them produces wrong amounts on both lines. 2 IRS Form 8995 Instructions — Line 6
PTP losses are the most common source of this carryforward REITs rarely produce negative dividends, but publicly traded partnerships can generate losses passed through on Schedule K-1. A PTP loss in a prior year is what typically creates a carryforward on this line. If you sold your PTP interest last year at a loss, check whether that loss created a negative amount on last year’s line 18. 3 IRS Publication 535 — Qualified Business Income Deduction
Watch out for this
Confusing this with the QBI loss carryforward on line 2. These are two separate carryforward pools. The REIT/PTP carryforward comes from prior-year line 18, not line 17. Entering the wrong carryforward amount on the wrong line reduces the wrong income type and produces an incorrect deduction.
Footnotes
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IRS Form 8995 Instructions, Line 6. https://www.irs.gov/instructions/i8995 ↩
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IRS Form 8995 Instructions, Lines 2 and 6 — Separate Carryforwards. https://www.irs.gov/instructions/i8995 ↩
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IRS Publication 535, Business Expenses, Chapter 12 (Qualified Business Income Deduction). https://www.irs.gov/pub/irs-pdf/p535.pdf ↩