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Rental Property Casualty Loss - 1040

ggadway
Level 1

The client had casualty losses on a rental property.  Property was uninsured.  When entering the casualty loss through the depreciation screen the loss properly flows through form 4684.  However, the loss then shows as as an ordinary gain for QBI purposes and is increasing the QBI deduction.  I must be entering the casualty loss incorrectly in the system, but I am at a loss as to why an it is showing income for QBI.  Any thoughts?

 

Also, would like to add that this rental property was placed in service in 2024 so this should not relate to depreciation recapture.

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