@Anonymous_ wrote:
Now, I have a question. Why would the IRS go through the trouble of researching and publishing a minimum hour requirement and incorporate that minimum into a safe harbor if a scenario existed where fewer hours would qualify? Following that line of reasoning, the IRS could easily have made the safe harbor 150 hours, or 100 hours, or 4 hours.
So many things are subject to facts-and-circumstances, and are subject to personal interpretation. That is why the IRS sometimes has a "Safe Harbor", to indicate they WON'T question something due to facts-and-circumstances if they meet certain criteria.
For example, let's consider the Reduced Maximum Exclusion for a Principal Residence in Regulation §1.121-3. If you look at (b), there is list of six things that could be subject to interpretation based on the specific facts-and-circumstances. But that is why the IRS/Treasury gives the "Safe Harbor" situations (or example, a job change that is 50 miles further) so you don't need to 'think' about and question whether it qualifies or not. But if the taxpayer does not meet the "Safe Harbor" (such as the 50 mile job-change test), then they need to interpret whether it qualifies based on the six criteria.
Similarly, the "Safe Harbor" for the QBI deduction is so you don't need to 'interpret' anything - it is a given. But if you don't meet the Safe Harbor test, you need to closely analyze the situation based on the facts-and-circumstances. And perhaps your analysis of the situation may different from another person, or the IRS. So that is why the IRS gives "Safe Harbors", so there are fewer 'arguments' if the specific facts-and-circumstances qualify or not.
