Qualified business income includes profits from a sole proprietorship, rental income (if your real estate investing rises to the level of a trade or business), qualified REIT dividends, qualified horticultural and agricultural dividends, income from qualified publicly traded partnerships, and the 'profit allocations' reported to you on your individual K-1.
Not included in qualified business income is:
- Capital Gains
- Foreign Earned Income
- Interest Income
- Dividend Income
- S Corporation shareholder-employee wages
- Guaranteed Payments (made to Partners of a Partnership)
- Amounts paid to a partner for services (Paid by Partnership)
Your deduction may be limited based on your income and if you are a Specified Service Trade or Business (SSTB).