Not filing a F1099 may merely mean that the requirement to file was unknown. That doesn't mean non-business status is claimed. If a person has a history of not filing Forms 1099 and claims the Safe Harbor, aren't they indicating the rental is a business, and if so, penalties would still apply for not filing the prior forms. Not claiming the Safe Harbor doesn't mean a payor is exempted from filing past Forms 1099. If a lessor claims the QBI deduction and is also obligated to file Forms 1099, it doesn't matter whether the Safe Harbor is claimed or not, the F1099 are still due. There are plenty of lessors who don't know about the F1099 requirement. In addition, if a lessor claims the Safe Harbor (indicating a trade or business) and when asked about filing past Forms 1099 states it was not required because there was no business those years would run into your same change in circumstances problem. I believe the F1099 issue is irrelevant in claiming the QBI deduction.
