- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
QBI & Safe Harbor
I've done a lot of reading and still a bit confused.
Last year it looks like I selected QBI but not safe harbor as I was able to file electronically.
I have one rental property. I am not a real estate professional. This property does make a profit.
I've done a ton of reading and there's so many differing opinions as to whether I really qualify. I don't personally spend 250 hours on the townhouse property but I do pay the association fee that pays for management and contractors for the exterior maintenance which surely adds up to many hours. I spend occasional time managing inside repairs. I don't know how I'd come up with the detailed hours the management company and contractors have spent on my particular unit.
I suppose I will start sending 1099s where applicable. I thought that only applied to being real estate professional which I am not. I now think it applies to being a business. So I don't know if I'd be red flagged for seemingly changing circumstances. Also may be red flagged for having claimed QBI last year and maybe not this year?
I also don't know what the qualifying difference is between safe harbor and QBI as QBI seems to require the 250 hours documented as well.
What is the definition of and why do they offer a safe harbor? (Laymans terms, not the IRS definition of this rental safe harbor, I've read it a few times already)
Thank you for your time.