It's fortunate that 250 hours are not "required" but is a safe harbor figure because that's a lot of record keeping for a small business owner who rents real estate. The IRS has treated most rental real estate as a business for numerous years so I disagree with their recent tightening in business status. There could be, but I don't recall the IRS disallowing Sec. 162 expenses as not meeting trade or business levels for houses that are actually rented at fair market rates. Expect court cases to follow.
