Question

Can't efile 2022 due to QBID safe harbor election

Forum|Forum|3 years ago
March 23, 2023
1 reply
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I've searched for answers regarding this subject as it relates to 2022 returns and haven't found anything. There was lots of discussion related to 2021 and prior. Has Turbotax been updated to allow a PDF attachment that is required for the safe harbor election? I've always used Turbotax but am very disappointed if this fix has not been addressed for 2022. What are my options?

Julie N

M

MonikaK1

Please refer to this help article regarding the safe harbor election. TurboTax will generate the De Minimis Safe Harbor Election form and add it to your tax return.

Answer the interview questions that appear in the Rental section and select that you wish to use the safe harbor election.

IRS Notice 2019-07 establishes a new safe harbor for rental real estate. Individuals and entities owning rental real estate can treat a rental real estate enterprise as a trade or business for QBI purposes if they meet certain requirements. Refer to IRS News Release IR-2019-158 for more information.

If all the safe harbor requirements are met, an interest in rental real estate will be treated as a single trade or business for purposes of the section 199A deduction.

Note that, if an interest in real estate fails to satisfy all the requirements of the safe harbor, it may still be treated as a trade or business for purposes of the section 199A deduction if it otherwise meets the definition of a trade or business in the section 199A regulations.

Please also see this TurboTax help article for more information.

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Z

zumbatax2023Author

TThank you but your answer explained how to quality for QBID (which I know and I do). I'm trying to figure out how to get Turbo Tax to either include in the forms or allow a PDF attached statement as required to use the QBID safe harbor. I am preparing a 2022 Form 1040 and Turbo Tax is not doing anything in regards to the required safe harbor statement for a rental property. I already did a trust Form 1041 with Turbo Tax Business and that package did create the required statement and it was a separate form in the return. Why does TurboTax Premier not do the same?

DawnC

Employee

Did you answer the safe harbor questions for the rental in the rental section of TurboTax? Search for rentals and use the Jump to rentals link to be taken to your Rental and Royalty Summary. Click on Edit next to your rental property. Scroll to the bottom and click on Done With Rental Property. You will then get a question regarding special situations, then be shown a summary of profit or loss. The next screen will be about the safe harbor.

You can opt for the safe harbor if you prove your rental was a business and not an investment. It lowers your audit risk plus gives a 20% deduction. If you qualify, answer YES and any follow-up questions (if you have a real estate enterprise) and click Continue. You will then be asked to confirm the property type and description. After that, you should find RREE Statement (1) in your Forms list. See the image below.

Can I get the QBI deduction on rental income?