What this line means
The sum of lines 5 and 6 — your current-year REIT dividends and PTP income plus any loss carryforward from prior years. If the result is zero or negative, enter zero. This adjusted amount is what gets multiplied by 20% on line 8 to determine your REIT/PTP component. 1
Does this apply to you?
- You have positive REIT dividends or PTP income on line 5 and no prior-year loss carryforward
- You have REIT/PTP income on line 5 that is partially reduced by a loss carryforward on line 6
- Your prior-year REIT/PTP loss carryforward completely offsets current-year income (enter zero)
- You have no REIT dividends, no PTP income, and no carryforward (enter zero)
Easy to overlook
You can have a REIT/PTP component even if your QBI component is zero The REIT/PTP calculation on lines 5 through 8 operates independently from the QBI calculation on lines 1 through 4. Even if your business income produced zero QBI, qualified REIT dividends or PTP income still generate a deduction. Complete both sections of the form. 2 IRS Publication 535 — Qualified Business Income Deduction
A negative result creates a carryforward, not a zero deduction forever If line 5 plus line 6 is negative, you enter zero here, but the negative amount moves to line 18 as a loss carryforward for next year. The loss is not wasted — it reduces future REIT/PTP income. 3 IRS Form 8995 Instructions — Line 7
Watch out for this
Do not enter a negative number on this line. The form instructions require zero if the sum of lines 5 and 6 is negative. The actual negative amount goes to line 18 as a carryforward. Writing a negative number here would produce a negative REIT/PTP component on line 8, which makes no sense and triggers an error.
Footnotes
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IRS Form 8995 Instructions, Line 7. 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 ↩
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IRS Form 8995 Instructions, Line 7 and Line 18. https://www.irs.gov/instructions/i8995 ↩