QBI eligibility for foreign rentals if taking safe harbor?
First, TurboTax asks: “Let’s see if you’re eligible for the QBI safe harbor?”
This screen focuses on the safe harbor requirements—250 hours of rental services, separate books and records, not using the property as a residence, etc. But there’s no mention of whether the activity must be U.S.-based.
If in this screen you answer:
No, I don’t (or can’t) — TurboTax moves to the next screen: “Is This Qualified Business Income?”. Here, a popup link “More info about what’s considered a qualified business” does mention that the activity must be U.S.-based, implying that foreign rentals don’t qualify.
Yes, for X or Yes, for an enterprise — TurboTax moves to “Confirming property type and description.” But at this point there’s no mention at all about the U.S.-based requirement.
So it looks like:
If you go down the “No” path, TurboTax explicitly tells you foreign rentals don’t qualify.
If you go down the “Yes” path, TurboTax never asks or warns about foreign rental ineligibility ever.
This raises the question: Does TurboTax’s safe harbor workflow inadvertently make it look like foreign rentals qualify for QBI if you answer “Yes” to the safe harbor test? Or is this simply a UI/wording problem in how TurboTax presents the questions?
