QBI for rental property

bptsj · ‎April 11, 2020

My wife and I own and manage several rental properties. We treat this as "Income from Rents & Royalties" but do not have a business entity or business name. Can we still select the Qualified Business Income deduction? The rentals are all within the US and the income is not wages. -- Thanks

KarenM90 · ‎April 11, 2020

Rental properties are usually treated as passive activities, and passive activities are excluded from the definition of a qualified trade or business.

However, rentals that qualify as trades or businesses under IRC § 162 are not considered passive, which means they could potentially qualify for the QBI deduction.

Please see this link for more details: QBI and Rentals

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parkervasil · ‎July 7, 2020

Thanks for the link to the article "Can I get the QBI deduction on rental income?".

It is unfortunate that the help in Quicken, including the on-demand tax guidance (What is a qualified business) doesn't include this information nor a link to the article nor a link to IRS Notice 2019-07.

In fact, the help in quicken is really misleading when it says: "In general, if rental or royalty activity is based in the U.S. and carried on with regularity, continuity, and a profit motive, then income from this activity is considered Qualified Business Income (QBI)."

James

QBI for rental property

Investors & landlords

Investors & landlords