250 hours of activity is NOT REQUIRED for rental property - that's a "safe harbor" election one may chose. I believe 90% of rentals qualify as a trade or business so no such election would be needed for those. I believe a rental with less than 250 hours of activity can easily be considered a trade or business. There are plenty of court cases that support rental real estate being considered a trade or business if the activity is regular, continuous, and with the expectation of profit (that includes the funds received from eventual sale). For purposes of Sec. 199A, any activity performed by any third parties on a rental property are attributable to the owner. Therefore, an owner could have most of the work done by someone else and still be fine. Therefore, I suggest not making the safe-harbor election except in somewhat rare circumstances. If the safe-harbor election is made, a statement signed under penalty of perjury must be attached to the income tax return. I know a CPA who teaches a course on Sec. 199A (20% QBI deduction) and those are his beliefs as well. If in doubt, I suggest contacting an EA (Enrolled Agent) or CPA who is FAMILIAR with the Sec. 199A provisions.
