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SharkTT
Level 1

QBI

I have a rental property, and I put in the 2019 TurboTax Premier edition that I qualify for the QBI deduction. Whether I do or not is still up for debate, but I wanted to return to where TurboTax asks that question but can not find how to do so. Does anybody know how to? Thanks 

9 Replies
ColeenD3
Expert Alumni

QBI

If you meet these tests, you may qualify to take the Qualified Business Income (QBI) deduction under the "Conventional Rental IRS Notice 2019-07 Safe Harbor Test", below.  To claim the new QBI deduction, you need to select the button in the rental interview that says you qualify to take it.

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bullflat
New Member

QBI

Do self-employed Farmers and Beauticians qualify for the QBI deduction?

JohnW222
Expert Alumni

QBI

Yes, self-employed farmers and beauticians will most likely qualify for the qualified business income (QBI) deduction.

To make sure that you qualify for the deduction, please see the TurboTax Help article "Do I qualify for the qualified business income deduction?".

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MrVette
Level 1

QBI

I'm in that grey area where I could or could not say my rental properties generate QBI. Is there an advantage taxwise going with the QBI path over claiming non-QBI? I seem to have the choice but don't know which choice is better.

RobertG
Expert Alumni

QBI

The problem with claiming QBI on a rental is that rentals often generate losses which would lower your QBI deduction for QBI income from other sources. 

 

If you expect your rentals to generate income each year, or if you don't expect to have other QBI income, then there is no downside to claiming QBI for your rental if you are entitled to do so.

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MrVette
Level 1

QBI

I have one rental that shows a loss and one that show a profit. The profit is much greater than the loss. Under that circumstance should I go with the QBI?

DavidS127
Expert Alumni

QBI

You should decide whether or not each rental property qualifies as a QBI business, and treat the rentals accordingly.

 

See Q48 under Rental FAQs at this IRS website for what makes a rental a QBI business.  

 

See the IRS article on the rental real estate safe harbor at this link for an overview of the safe harbor requirements.

 

For more than one QBI business on the same return, you get a QBI deduction when you there is a net income from all the QBI businesses.  Net losses from the QBI business carried over to offset future year QBI income.  

 

Assuming both your rentals meet the safe harbor requirements for QBI, the profit and the loss will be netted for the QBI calculation, if the losses are deducted on the tax return.  Passive losses not deducted on the tax return are carried forward to future years when the losses are actually deducted on the tax return.

 

@MrVette

 

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MrVette
Level 1

QBI

In the past I have determined that I met the QBI qualifications. So is there any point in now claiming safe harbor vs qualified business? It appears the downside of safe harbor is having to submit a sworn statement and not being able to submit my return electronically.

DianeW777
Expert Alumni

QBI

If you are confident with the safe harbor rules and believe your rental activity supports qualified business income (QBI) then you can choose to answer yes to QBI without selecting yes to the safe harbor question.  You can see if this allows e-file without the error.

 

Be sure to keep you safe harbor verification in your tax files.

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