Contemporaneous records of services performed must be kept which includes who performed the service, description of service, the date of the service, and how long it took (who, what, when, and how long).
The tax law provides a safe-harbor under which income from rental real estate (even if treated as passive) can qualify as qualified business income (QBI). The requirements are:
- 250 hours or more are spent by the taxpayer with respect to the rental activity
- Contemporaneous records of the time are maintained
- Separate books and records for the rental activity are maintained
Time spent related to the rental activity on advertising, negotiating with tenants, verifying applications, daily operation, repair and maintenance, purchase of materials, and supervision of employees all count toward the required 250 hours. Time spent purchasing or financing the acquisition of the property and time spent traveling to and from the property do not generally qualify.
QBI on Rental Income
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
