How can I add the QBI Safe Harbor Statement to my 2018 1040 tax return before I file electronically?

[TaxGuyBill]

Are you referring to the Safe Harbor for rental properties with 250 hours?

If so, you can't if you are doing your personal tax return.  The Safe Harbor needs to signed by you, and you can not add attachments to the e-file for personal editions of TurboTax.

[Critter]

The new section 199A deduction propagates from the QBI Deduction Summary to the 1040 Worksheet to Form 1040 line 9. automatically ... why do you need to attach one ? 

What is the new 20% QBI Deduction
https://ttlc.intuit.com/questions/4499030-what-is-this-new-20-business-deduction

[kmenace45]

So are you saying everyone using the QBI statement has to paper file their return? I would think the IRS would accept efiling signatures for that as well.

[tagteam]

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@kmenace45 wrote:

So are you saying everyone using the QBI statement has to paper file their return? I would think the IRS would accept efiling signatures for that as well.

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The dates on the posts in this thread (above) are not accurate. The thread was transferred to this Community from another TurboTax board so the posts are probably months older than they appear.

Regardless, TurboTax now has the relevant statement (199A Safe Harbor) included in its forms. The election, however, it appears, must be made on the Schedule E Worksheet via a checkbox (which, in turn, generates the statement). E-filing the entire return, including the statement, is still possible, in any event.

[kmenace45]

I thought it had to be signed by the taxpayer.  And I haven't figured out how to handle it if you want to aggregate your rental properties, it would seem you would need only 1 statement not 1 for each property as you are not saying each had 250 hours of work. 

[tagteam]

Frankly, I am not certain with respect to how TurboTax handles the statement since it does have a signature line. On the other hand, since the statement appears to be transmitted with the rest of the return, it would not make much sense to then have to print out, sign, and mail the statement. You could ask Support (link below) if they have any further information regarding e-filing a return with that particular statement.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

Regarding the aggregation, I would imagine it should work if you added descriptions (or even addresses) of all of the properties to which the statement pertains. Alternatively, you could indicate that the statement is applicable to all of the properties reported on Schedule(s) E of the return. At any rate, I also believe you would not need a separate statement for each property.

[kmenace45]

I did try to call Turbo tax.  It took some time, the phone call got disconnected for some reason and the person I got did not even know what the Sec 199A deduction was nor had she read any of the regulations. She just said that if I answered all the questions I should be good as they comply with the IRS requirements. I am not so sure of that as I think I will have to paper file so I can revise the statement to include all properties (versus having a statement for each one which is not correct)  and sign it. 

[tagteam]

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@kmenace45 wrote:

...I think I will have to paper file so I can revise the statement to include all properties (versus having a statement for each one which is not correct)  and sign it. 

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I presume you are using an Online version of TurboTax. Irrespective of the e-filing issue, you can easily revise the statement in Forms Mode, which is available in all of the desktop (CD/Download) versions.

[kmenace45]

Not much room there to write. Would you just edit one safe harbor statement to aggregate all rental properties and delete the other forms?  They are automatically generated when you click for the 20% deduction

[tagteam]

The RP is designed to cover a "real estate enterprise", which can consist of multiple properties.

See https://www.journalofaccountancy.com/news/2019/sep/rental-real-estate-safe-harbor-qbi-deduction-2019...

[kmenace45]

Thanks, I had seen that article.

Turbo tax sent me the following link

https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/how-can-i-group-a-ren... 

I'll figure it out.  I hope that next year Turbo Tax changes how they do the safe harbor statement and I gave them my input. 

[tagteam]

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@kmenace45 wrote:

I'll figure it out.  I hope that next year Turbo Tax changes how they do the safe harbor statement and I gave them my input. 

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I hope so as well, but they are pretty much tied to whatever the IRS dictates in terms of forms and schedules.

Also, in the event it was unclear, you can use the safe harbor by following the guidelines in the Rev. Proc. 19-38 (link below); you do not have to aggregate the rental properties on your return like you might if you were grouping rental activities under Section 1.469-9(g) for real estate professionals.

https://www.irs.gov/pub/irs-drop/rp-19-38.pdf

[kmenace45]

My CPA friends feel the statement is required for 2018 and all the rental properties you are aggregating should be on it and it has to be personally signed which my turbo tax does not support. I am filing paper this year. 

[Critter]

For 2018 the QBI rules and reporting are relaxed ... starting in 2019 there will be mandatory reporting so for 2018 I would not worry.