It depends. Rental
properties are typically treated as passive activities, which 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, and that means their income can qualify for the QBI deduction. See more information on rentals that qualify as trades or businesses in the FAQ linked at the end of this answer.
But first, note that income from these
types of rentals is specifically excluded
for the purposes of the QBI deduction:
- Passive rental activities
that are not considered a trade or business
- For example, a single-family
dwelling rented out for a year or more in which there is little or no
interaction between the landlord and the tenants other than periodically
collecting rent and the occasional repair
- Property used as a residence
by the taxpayer for any part of the year under IRC § 280A
- This includes vacation
homes, cabins, seasonal or "snowbird" residences, etc.
- Triple-Net (NNN) leases,
where the tenant or lessee pays real estate taxes, insurance, and
maintenance in addition to rent and utilities
- Rentals located outside the
United States
- Land rentals
If your rental or
rental activities fall into any of the above categories, you can't take the QBI
deduction on the income.
And here is more information on whether income from rental activities can be included for QBI, along with the requirements in order for a rental property enterprise to be considered a trade or business:
