Rental property 20% deduction? My wife and I are self-employed. She's a full-time real estate professional (+750 hours), I'm not. Rental property title is in my name.

We live in California, which is a common law state.

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Can you provide some more details regarding your question? Qualified business income, or QBI, is the net income generated by any qualified trade or business under Internal Revenue Code (IRC) § 162.

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. To provide preliminary guidance to this popular question, the IRS released Notice 2019-07, the key points of which we've summarized below.

Exclusions

Real Estate Professionals

Everybody Else

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