Take QBI or not?

Forum|Forum|3 years ago
February 1, 2023
1 reply
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We purchased a property last year as a rental property. It's a duplex. We have a family member renting one unit while the other unit is rented out to the public. The combined rents don't cover our mortgage payment, so to us it's more of an investment property. We don't have a business license, because as far as I know, in our state, we are not required to have a business license to rent the property. We basically collect rent and make repairs as needed. I do keep separate records for bookkeeping of the duplex. I'm confused about whether to take QBI on our taxes, or not, because this is not a single-family property, it's a duplex, and we don't make any profit from the rents after our mortgage is paid each month. Does this situation qualify for QBI on our taxes this year?

Not A Product Question

mglauner

You may qualify for QBI. Here's detailed info on How QBI is calculated for your review.

In your case, if you're not renting to your family member at 'fair market rent' that unit wouldn't qualify as a rental property (an investment, as you mention); however, the other unit that is rented publicly would qualify. You could set up a Schedule E for just that unit and report income/expenses proportionately for that unit.

Since QBI is calculated on Business Income (and other income), until you enter everything it's hard to predict whether you would receive a credit, although TurboTax will calculate it for you if it applies.

Here's more info on QBI and Rental Property.