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February 17, 2024
Question

QBI Enterprise Election

  • February 17, 2024
  • 1 reply
  • 0 views

Why is it, once elected, an Enterprise is "permanent" and can't be changed? Or can it? I have three rental homes and concluded this election has no impact on me and probably should never have been elected three years ago. Now I wish to correct my error. Any suggestions?

1 reply

PatriciaV
Employee
February 19, 2024

According to the IRS regulations for Qualified Business Income, "Once an aggregation election is made, the aggregation must be consistently applied unless there has been a significant change to the facts and circumstances which would render the aggregation no longer appropriate."

 

The disposition of a rental property would be considered a significant change. In this case, you would reapply the enterprise rules and define a new enterprise. 

 

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