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I rent out a townhouse in 2018. And I managed it by myself (advertising, maintenance etc.). Do I qualify for QBI deduction? Thanks!

 
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I rent out a townhouse in 2018. And I managed it by myself (advertising, maintenance etc.). Do I qualify for QBI deduction? Thanks!

It depends. If you live in part of the townhouse, even if you live on the other side of the townhouse the answer would be no.

Otherwise, it is possible but not likely with only one property as it is hard to rise to the level of it being a business. The rules will eventually require 250 hours of rental services to be conducted to claim the QBI. 


"3 Safe harbor. Solely for the purposes of section 199A, a rental real estate enterprise will be treated as a trade or business if the following requirements are satisfied during the taxable year with respect to the rental real estate enterprise: (A) Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise; (B) For taxable years beginning prior to January 1, 2023, 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental enterprise. For taxable years beginning after December 31, 2022, in any three of the five consecutive taxable years that end with the taxable year (or in each year for an enterprise held for less than five years), 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental real estate enterprise; and (C) The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: (i) hours of all services performed; (ii) description of all services performed; (iii) dates on which such services were performed; and (iv) who performed the services. Such 8 records are to be made available for inspection at the request of the IRS. The contemporaneous records requirement will not apply to taxable years beginning prior to January 1, 2019.https://www.irs.gov/pub/irs-drop/n-19-07.pdf

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I rent out a townhouse in 2018. And I managed it by myself (advertising, maintenance etc.). Do I qualify for QBI deduction? Thanks!

It depends. If you live in part of the townhouse, even if you live on the other side of the townhouse the answer would be no.

Otherwise, it is possible but not likely with only one property as it is hard to rise to the level of it being a business. The rules will eventually require 250 hours of rental services to be conducted to claim the QBI. 


"3 Safe harbor. Solely for the purposes of section 199A, a rental real estate enterprise will be treated as a trade or business if the following requirements are satisfied during the taxable year with respect to the rental real estate enterprise: (A) Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise; (B) For taxable years beginning prior to January 1, 2023, 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental enterprise. For taxable years beginning after December 31, 2022, in any three of the five consecutive taxable years that end with the taxable year (or in each year for an enterprise held for less than five years), 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental real estate enterprise; and (C) The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: (i) hours of all services performed; (ii) description of all services performed; (iii) dates on which such services were performed; and (iv) who performed the services. Such 8 records are to be made available for inspection at the request of the IRS. The contemporaneous records requirement will not apply to taxable years beginning prior to January 1, 2019.https://www.irs.gov/pub/irs-drop/n-19-07.pdf

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

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