Solved: Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.
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kloneill
New Member

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

I am positive I do not qualify for it.

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DanielV01
Employee Tax Expert

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

You probably do qualify for QBI.  While it is a "gray area" of the code, a rental activity is generally considered to be a rental that qualifies as "a trade or business under Section 162" if it is a for-profit venture.  While, as I mention, there is gray area involved, court cases have indicated that even a single rental can be for-profit when it is being rented at a fair rental value in the area.

Yes, the IRS printed the safe-harbor regulations you refer to with your comment.  But even if your rental does not fall under the category of the safe-harbor regulations, your rental can (and probably does) pass the test as a "qualifying trade or business under Section 162).  

In other words, if you have reported your rental on Schedule E, with allowable deductions and depreciation taken, and you still have an income, you should feel reasonably confident that you may take the QBI deduction.  What would not qualify is something like a below-market rental such as a rental to a close relative.  

Feel free to comment if you still feel you shouldn't take the deduction.

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DanielV01
Employee Tax Expert

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

It depends.  What items are showing up that are calculating for the deduction?  Do you have a 1099-DIV statement with box 5 filled in?
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kloneill
New Member

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

No 1099-DIV  I am thinking it must be some question I answered about a rental property.  Im going to review those.
DanielV01
Employee Tax Expert

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

That's fine.  Why do you believe you don't qualify to receive QBI?
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kloneill
New Member

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

Because we have one rental property and don't spend time on it.
DanielV01
Employee Tax Expert

Can I get rid of the Qualified Business Income Deduction on my return?I do not qualify for it.

You probably do qualify for QBI.  While it is a "gray area" of the code, a rental activity is generally considered to be a rental that qualifies as "a trade or business under Section 162" if it is a for-profit venture.  While, as I mention, there is gray area involved, court cases have indicated that even a single rental can be for-profit when it is being rented at a fair rental value in the area.

Yes, the IRS printed the safe-harbor regulations you refer to with your comment.  But even if your rental does not fall under the category of the safe-harbor regulations, your rental can (and probably does) pass the test as a "qualifying trade or business under Section 162).  

In other words, if you have reported your rental on Schedule E, with allowable deductions and depreciation taken, and you still have an income, you should feel reasonably confident that you may take the QBI deduction.  What would not qualify is something like a below-market rental such as a rental to a close relative.  

Feel free to comment if you still feel you shouldn't take the deduction.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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