Proc. 2019-38 providing a safe harbor for rental real estate enterprises. I have two residential rentals and a revocable trust. I did not create and LLC or Sole Proprietor corp. Can I claim the safe harbor? I am just an individual landlady. M. thanks, BL

[Anonymous_]

Do you meet the criteria starting on page 5?

https://www.irs.gov/pub/irs-drop/rp-19-38.pdf

[Carl]

@Anonymous_ assumes you are referring to the QBI deduction. If that's correct then it's not common for someone with less than 3 rental properties to qualify for the QBI deduction. I myself have 3 rental properties and don't come anywhere close to satisfying the requirements for this, even if I consolidate all 3 of my properties into a single enterprise.

If you are not referring to the QBI deduction, then let us know just what it is you are referring to. For example, if you have a property improvement that you paid less than $2,500 for, it may qualify to be a deductible expense under safe harbor de-minimus if certain specific criteria are met.

[Anonymous_]

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@Carl wrote:

@Anonymous_ assumes you are referring to the QBI deduction. 

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I am assuming nothing, @Carl. Rev. Proc 2019-38 was mentioned in @bien9luc's question and it specifically addresses the safe harbor for the QBI deduction.

[Carl]

Yes. But while the Proc does refer to QBI, the term "safe harbor" can refer to more than just the QBI deduction. While the poster is referring to QBI, it can tend to confuse a reader, just as it did me at first, since IRS Notice 2015-82 uses the "safe harbor" term also.  Perhaps I should have clarified in my previous post, just as I did now.

[Anonymous_]

Nevertheless, it would be a bit odd if @bien9luc had been referring to some other safe harbor (such as that addressed in Notice 2015-82, which was not even mentioned in the original post), when the first line of the Revenue Procedure that WAS mentioned in the question is:

This revenue procedure provides a safe harbor under which a rental real estate enterprise will be treated as a trade or business for purposes of section 199A