Rental Income and Qualified Business Income

[terimac4]

I am preparing taxes for my parents. They own one rental property in California and have owned this for over 20 years. I cannot remember if they qualify for the Qualified Business Income or not. It seems to apply to them, but I wanted to make sure before I checked that box. They are both retired and used to own more properties but are down to one as they have gotten older.

Thank you!

[JohnW152]

Your parents may qualify for the QBI deduction, if their rental activity constitutes a trade or business.

Generally, this means their rental real estate enterprise (a rental property) must satisfy these three requirements:

1. Each enterprise maintains its own books and records to track income and expenses
2. At least 250 hours of rental services are performed per year per enterprise
3. Contemporaneous records of services performed are kept which includes who performed the service, description of service, the date of the service, and how long it took (who, what, when, and how long).

But there are a number of factors that can apply.

Please see the TurboTax Help articles How do I know if my rental property qualifies for the Qualified Business Income deduction (QBID)? and Can I get the QBI deduction on rental income? for more details.