Figuring out what type of rental property qualifies for the qualified business income deduction (QBID) can be a little tricky, but don't worry! We’ll help guide you through the process.
To get started, you’ll need to get to the QBID section in TurboTax.
- Sign in to TurboTax and open your return.
- Select Search.
- Enter Qualified business income deduction in the search bar.
- Select Jump to Qualified business income deduction to get to the QBID section.
Next, you'll answer questions based on your rental type to determine if it qualifies for the QBID.
- Select Rentals and royalties (Schedule E) on the Qualified Business Income Deduction Summary screen.
- Answer Yes to Do you have any income from rentals or royalties?
- Check any that apply on the Let’s see if you’re a Real Estate Professional screen.
- Complete the information for your income and expenses.
- Select Done with rental property on the Review your (property name) rental summary screen.
- Select any situations that apply on the Any Other Situations? screen, then select Continue (TurboTax CD/Download only).
- Answer Do you want to use a safe harbor to qualify this property for a deduction?, then select Continue.
- Select Yes or No on the Is this Qualified Business Income? screen to complete the interview for your rental property and the QBID.
The questions we ask vary depending on your rental property type. Here’s an overview of what you can expect.
- What is rental depreciation and how does it differ from an expense?
- How do I handle capital improvements and depreciation for my rental?
- What kinds of rental property expenses can I deduct?
- What can I deduct when refinancing rental property?
- What can I expense or depreciate with the business safe harbor election?