Remove QBI Rental Real Estate Safe Harbor Statement: erroneously selected

[sarawgodwin]

I have searched a lot, and I'm not able to find where I selected QBI initially. I am self-employed and I have a rental property, but it isn't showing up under either. Do I need to start my taxes over? Thanks in advance!

[tagteam · Accepted solution]

You do not need to start your return over. Rather you need to go through the Rental Properties section again and select the proper choice in the QBI screen (see screenshot).

[sarawgodwin]

Thanks for the quick reply! I have tried that multiple times, but that screen hasn’t come up again after the first time I selected it. Is there any other way to navigate to that option than to click through the typical way? If so, can you walk me through it step by step? Thanks again!

[djay49]

I had the same problem. I couldn't delete the Safe Harbor statement in Forms view (it just kept reappearing). So I went back to the beginning of the Rental Property section and clicked through the info, income, and expense questions for the property, and right at the end, after it looked like it was all done, the Safe Harbor question screen appeared and I was able to deselect the option. Hope this works for you!

Ps. On the separate "Is this Qualified Business Income?" screen, you can still select Yes there if your rental activity meets the definition shown ("based in the U.S. and carried on with regularity, continuity, and a profit motive"), which most ordinary rental businesses would.

[DavidS127]

Note that if you declare your rental a trade or business without using the Safe Harbor, you may become subject to the other requirements of a Section 162 trade or business.  See Q17 on the IRS webpage at this link.  For example, the IRS has not made it clear whether a rental activity conducted as a Section 162 trade or business is subject to the Form 1099-MISC requirements.

[hkaa138]

I didn't claim Rental Property QBI, uncheck the box on Schedule E, but the SEC A "Rental Real Estate Safe Harbor Statement" still included in my return. How to remove the statement from my return? Thank you very much!

[DavidS127]

Here's how to check for a form in TurboTax Online: 

1. Open or continue your return in TurboTax.
2. In the left menu, select the dropdown arrow next to Tax Tools and then Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Scroll down the page and look for the form you need to delete, e.g., a safe harbor election statement.
5. Select Delete next to the form you want to delete and confirm the deletion.

Click here for the full article on deleting a form in TurboTax.

TurboTax Download/CD users don't have that left menu panel with Tax Tools.  Download/CD users go to Forms mode to delete a form.  Find the form in the left column, click on it and it will open. Then, click the Delete Form button at the bottom.

@hkaa138

[hkaa138]

Thank you so much for your quick reply. But I don't see "Delete Form Button" at the bottom. 

[DavidS127]

The Delete a Form button is for Download/CD users in Forms mode (icon top right in blue bar):

[gregmoore617]

I selected the "NO" option cited below and the Safe Harbor Statement is still included in my return. Any other suggestions?

[Critter-3]

Please use the following link to contact Customer Support for further assistance.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

[FAA1]

I have 5 rentals.  I did not select QBI for any of these incomes, but TurboTax shows one of my rental income as QBI.  This generates a 8895 and adds a figure to my taxable income on line 13 of my 1040.  Where did Turbo Tax get this erronious information?

[FAA1]

Thanks.  I can truthfully say that I never saw this page or questioin during the interview process of entering all the expenses on any one of these prooerties. It is amazing that it did not apply to all 5.  

[TH132]

2021 Return:   Turbo tax submitted a form 199A Rental Real Estate Safe Harbor Statement.    I distinctly recall reviewing this section (contradicting my entry) and answering NO for QBI, so I was surprised to see this statement in my return.   

Like reports for 2020 tax year, I was unable, despite over 1/2 hour, to find anyplace thru easy step where I could 'undo' this designation.    (I am using the downloaded version of TurboTax on a Mac).   

Opening FORMS, Schedule E Wks (worksheet) there is a section called Qualified Business Income Deduction Smart Worksheet.     In my return, A1 "Is this activity a qualified trade or business?"  is checked NO.    The rest of the worksheet is empty except the Schedule A Smart Worksheet.

Active Participant checkbox is properly checked with an "X" based on the turbo tax easy guide.  I select tenants, clean and maintain the unit (via Airbnb), but do not spend 250 hours per year in this activity (as needed for the QBI).   

To Remove this form, I went to FORMS, then selected the QBI form, then Turbo Tax menu (top menu - on the MAC version this pops up.; on windows it may be there continuously).    Click on FORMS, and Remove (form name). 

Deleting the QBI form did not change the QBI Deduction Smart Worksheet (part of Sched E Wks) box checked "No." 

Turbo Tax?   How is this supposed to work?   

Need to refile.  

[DianeW777]

There are actually two questions that must be answered, so that TurboTax is clear on your decision about your rental property.  First the one about safe harbor and a second question about whether this property qualifies for the qualified business income deduction (QBID).

1. Open your TurboTax return > Search (upper right) > Type rentals > Press enter > Click the Jump to... link
2. When you complete the rental property and you are at the summary screen, click 'Done With Rental Property'
3. Answer the questions on the 'Any Other Situations' screen > Continue > Continue
4. Select 'None of these apply' on the screen 'Do you want to use a safe harbor to qualify this property for a deduction?'
5. Select 'No, this income is not qualified, on the screen 'Is this Qualified Business Income?'

Once these steps are completed TurboTax will not allow QBID for this property.

For TurboTax Online the following steps can be used:

1. Open your TurboTax return > Search (upper right) type rentals > Press enter > Click the Jump to ... link
2. Edit next to your rental activity > Scroll to Qualified Business Income > Edit/Update >
3. Select 'None of the above' on the Real Estate Professional page
4. Continue to the page Do you want to use a safe harbor to qualify this property for a deduction?
5. Select 'None of these apply' > Continue
6. Select 'No', on the page  Is this Qualified Business Income?

• How to amend (change or correct) a return already filed (and accepted at the IRS)
  • Review the information here to be sure you need to amend your return.
• Steps to amend my 2020 return