Level 3
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Tax reform

The recently published 199A Safe Harbor Rules for a Rental Business to be considered a Qualified Business, introduce the requirement to log hours worked on certain activities starting with tax year 2019; this is to establish that at least 250 hours of services are being performed with respect to rental-related activities, however, investment activities do not count toward the 250-hour requirement. I have three questions regarding this time log requirement:

  • Does time spent on Accounting and on activities required by the business structure (e.g., LLC membership meetings, reports, etc.) count towards the 250 hours?
  • Does each activity need to be logged with beginning time and ending time or is it sufficient to report hours worked on each day on each type of activity?
  • In a rental business aggregated of several Schedule E Properties, does the log need to identify the specific property each activity was conducted for?

Thank you for your response with regards to any of these questions.