Rental and QBI

Forum|Forum|3 years ago
February 9, 2023
2 replies
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I rent my old house, it is a couple miles away and have long term tenants…I collect rent, do repairs basically all the management stuff….can I claim the QBI? I don’t spend 250 hours a year but it seems like you claim the Qbi but not the safe harbor part?

ThomasM125

Yes, you can claim the QBI since you are active in the rent of the property. You don't need to qualify for the safe habor, it is just something that would give you extra protection.

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Mike9241

some TPs don't really know what the 250 hour rule says so here's what the iRS says

250-Hour Requirement.
• advertising to rent or lease the real estate;
• negotiating and executing leases;
• verifying information contained in prospective tenant applications;
• collection of rent;
• daily operation, maintenance, and repair of the property, including the purchase of materials and supplies;
• management of the real estate; and
• supervision of employees and independent contractors.
Moreover, rental services can be performed by owners, employees, agents, and/or independent contractors of the owners. Accordingly, it will become very important that vendors who perform services that could be counted towards the 250-hour requirement provide documentation.
The above list does not purport to be exhaustive. Specifically excluded are the following activities: financial or investment management activities, such as arranging financing; procuring property; studying and reviewing financial statements or reports on operations; improving property under §1.263(a)-3(d); and hours spent traveling to and from the real estate.