Basically, there are three items that must be true (or rules that must be adhered to) in order for rental real estate income to qualify for the QBI deduction. Very few rental property owners will actually qualify for this deduction.
I myself have 3 rental properties and I can't come anywhere close to meeting the 250 hours requirement on all three rental properties combined. SO if you only have two rental properties, I seriously doubt you will qualify either. Here's the rules straight out of IRS Notice 2019-07 at https://www.irs.gov/pub/irs-drop/n-19-07.pdf I would suggest you read the entire document yourself, as the below is just a snippet.
It's important to be aware that the 250 hours requirement of item (B) does not include "book keeping" time, as clarified in the last paragraph of the below snippet. Hopefully this information will help you formulate the facts you need to include in your description. But regardless, if you only have two rental properties you can fully expect to be queried by the IRS about your claim to the QBI deduction about 24-36 months after you file your tax return claiming it.
03 Safe harbor. Solely for the purposes of section 199A, a rental real estate enterprise will be treated as a trade or business if the following requirements are satisfied during the taxable year with respect to the rental real estate enterprise:
(A)Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise;
(B)For taxable years beginning prior to January 1, 2023, 250 or more hours of rental services are performed (as described in thisrevenue procedure) per year with respect to the rental enterprise. For taxable years beginning after December 31, 2022, in any three of the five consecutive taxable years that end with the taxable year (or in each year for an enterprise held for less than five years), 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental real estate enterprise; and
(C)The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following:
(i) hours of all services performed;
(ii) description of all services performed;
(iii) dates on which such services were performed; and
(iv) who performed the services. Such records are to be made available for inspection at the request of the IRS. The contemporaneous records requirement will not apply to taxable years beginning prior to January 1, 2019..04 Rental services. Rental services for purpose of this revenue procedure include:
(i) advertising to rent or lease the real estate;
(ii) negotiating and executing leases;
(iii) verifying information contained in prospective tenant applications;
(iv) collection of rent;
(v) daily operation, maintenance, and repair of the property;
(vi) management of the real estate; (vii) purchase of materials; and
(viii) supervision of employees and independent contractors.
Rental services may be performed by owners or by employees, agents, and/or independent contractors of the owners. The term rental services does not include financial or investment management activities, such as arranging financing; procuring property; studying and reviewing financial statements or reports on operations; planning, managing, or constructing long-term capital improvements; or hours spent traveling to and from the real estate.
