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bptsj
Level 2

QBI for rental property

My wife and I own and manage several rental properties. We treat this as "Income from Rents & Royalties" but do not have a business entity or business name. Can we still select the Qualified Business Income deduction? The rentals are all within the US and the income is not wages. -- Thanks

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KarenM90
Level 11

QBI for rental property

Rental properties are usually treated as passive activities, and passive activities 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, which means they could potentially qualify for the QBI deduction.

 

Please see this link for more details:  QBI and Rentals

 

 

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2 Replies
KarenM90
Level 11

QBI for rental property

Rental properties are usually treated as passive activities, and passive activities 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, which means they could potentially qualify for the QBI deduction.

 

Please see this link for more details:  QBI and Rentals

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
parkervasil
Level 2

QBI for rental property

Thanks for the link to the article "Can I get the QBI deduction on rental income?". 

 

It is unfortunate that the help in Quicken, including the on-demand tax guidance (What is a qualified business) doesn't include this information nor a link to the article nor a link to IRS Notice 2019-07.

 

In fact, the help in quicken is really misleading when it says: "In general, if rental or royalty activity is based in the U.S. and carried on with regularity, continuity, and a profit motive, then income from this activity is considered Qualified Business Income (QBI)."

 

James

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