U.S. · Form 8995 line 16
Form 8995 line 16 total qualified business (loss) carryforward.
How a qualified business loss is carried to next year, and why line 4 is floored at zero.
Line 16 is the total qualified business (loss) carryforward: combine lines 2 and 3, and if the result is greater than zero, enter zero. A negative result is the loss carried to next year, where it offsets qualified business income whether or not the business still exists. Line 4 is the same combination floored at zero, which feeds line 5 at 20%.
Lines 2 to 5 and 16
Result
The lines involved
| Line | What it is (2025 form) |
|---|---|
| 2 | Total qualified business income or (loss): combine lines 1i through 1v, column (c) |
| 3 | Qualified business net (loss) carryforward from the prior year, entered in parentheses |
| 4 | Total qualified business income: combine lines 2 and 3; if zero or less, enter zero |
| 16 | Total qualified business (loss) carryforward: combine lines 2 and 3; if greater than zero, enter zero |
| 17 | Total qualified REIT dividends and PTP (loss) carryforward: combine lines 6 and 7; if greater than zero, enter zero |
What the instructions say
If you have a qualified business net loss for the year, you do not qualify for the QBI deduction unless you have qualified REIT dividends or qualified PTP income, and the loss is carried forward. The line 16 amount offsets QBI in later tax years regardless of whether the business that generated the loss is still in existence. The carryforward does not affect the deductibility of the loss for any other provision of the Code. Line 3 includes only the qualified portion of a loss allowed in calculating taxable income this year; losses still suspended by other Code provisions are not qualified losses and must be tracked separately.
Worked example
Line 2 is -$8,000 and the prior-year carryforward on line 3 is $2,000 (shown in parentheses). Combined, lines 2 and 3 are -$10,000, so line 4 is zero, line 5 is zero and line 16 is $10,000, which becomes line 3 next year. If line 2 were +$30,000 with the same $2,000 carryforward, line 4 would be $28,000, line 5 $5,600 and line 16 zero. Amounts are illustrative.
What this page does not do
It does not decide which items count as qualified business income, or track losses suspended by sections such as 163(j), 465 or 469. The qualified REIT and PTP loss has its own line 17; see line 6. For a deduction estimate use the QBI deduction calculator.
Sources
- Instructions for Form 8995 (2025): Line 3, 4, 16 and 17 text and the notes on losses suspended by other provisions. Read November 2, 2026.
- Form 8995 (2025): The exact wording of lines 2 to 5, 16 and 17. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What is Form 8995 line 16?
The total qualified business (loss) carryforward: lines 2 and 3 combined, with zero entered if the result is greater than zero.
Does the loss carry forward if the business closes?
Yes. The instructions say the amount offsets QBI in later years regardless of whether the trade or business that generated the loss still exists.
Can I take the QBI deduction with a qualified business loss?
Not unless you have qualified REIT dividends or qualified PTP income. The loss is carried forward.
How is line 16 different from line 4?
Both combine lines 2 and 3. Line 4 enters zero if the total is zero or less; line 16 enters zero if the total is greater than zero.
Where is the REIT and PTP carryforward?
On line 17, which combines lines 6 and 7 in the same way.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.