DC tax law treats rental real estate differently from federal Section 179 rules, no matter how involved you are. It’s based on how DC classifies the activity, not your participation. Section 179 ...
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DC tax law treats rental real estate differently from federal Section 179 rules, no matter how involved you are. It’s based on how DC classifies the activity, not your participation. Section 179 generally applies only to property used in an active trade or business. The IRS is very explicit that rental real estate is not considered an active trade or business unless you qualify as a real estate professional and the property is used in a way that meets the “active conduct” test. Even then, Section 179 still excludes most real property improvements, except for a few categories like: Qualified improvement property (QIP) Certain roofs, HVAC, fire protection, alarm, and security systems (post‑2018) DC does not conform to federal Section 179 for rental real estate. DC law treats rental activity as unincorporated business income, and the District requires an add‑back for any federal Section 179 deduction taken on rental property. This is why tax professionals consistently say:"If you take Section 179 on your federal return for rental property, you must add it back on your DC D‑30". Your level of participation does not change this. DC’s rule is based on the type of property, not your involvement. @JohnVeilleux