Just having one rental property will not usually meet the safe harbor requirements to take the QBI deduction :
03 Safe harbor.
Solely for the purposes of section 199A, a rental real estate
enterprise will be treated as a trade or business if the following requirements are
satisfied during the taxable year with respect to the rental real estate enterprise:
(A) Separate books and records are maintained to reflect income and
expenses for each rental real estate enterprise;
(B) For taxable years beginning prior to January 1, 2023, 250 or more hours
of rental services are performed (as described in this revenue procedure)
per year with respect to the rental enterprise. For taxable years beginning
after December 31, 2022, in any three of the five consecutive taxable
years that end with the taxable year (or in each year for an enterprise held
for less than five years), 250 or more hours of rental services are
performed (as described in this revenue procedure) per year with respect
to the rental real estate enterprise;
and
(C) The taxpayer maintains contemporaneous records, including time reports,
logs, or similar documents, regarding the following: (i) hours of all services
performed; (ii) description of all services performed; (iii) dates on which
such services were performed; and (iv) who performed the services.
Such
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records are to be made available for inspection at the request of the IRS.
The contemporaneous records requirement will not apply to taxable years
beginning prior to January 1, 2019.
.
04 Rental services. Rental services for purpose of this revenue procedure
include:
(i) advertising to rent or lease the real estate;
(ii) negotiating and executing
leases;
(iii) verifying information contained in prospective tenant applications;
(iv)
collection of rent;
(v) daily operation, maintenance, and repair of the property;
(vi)
management of the real estate;
(vii) purchase of materials; and
(viii) supervision of
employees and independent contractors.
Rental services may be performed by owners
or by employees, agents, and/or independent contractors of the owners.
The term
rental services does not include financial or investment management activities, such as
arranging financing; procuring property; studying and reviewing financial statements or
reports on operations; planning, managing, or constructing long-term capital
improvements; or hours spent traveling to and from the real estate.
.
05 Certain rental real estate arrangements excluded.
Real estate used by the
taxpayer (including an owner or beneficiary of an RPE relying on this safe harbor) as a
residence for any part of the year under section 280A is not eligible for this safe harbor.
Real estate rented or leased under a triple net lease is also not eligible for this safe
harbor. For purposes of this revenue procedure, a triple net lease includes a lease
agreement that requires the tenant or lessee to pay taxes, fees, and insurance, and to
be responsible for maintenance activities for a property in addition to rent and utilities.
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This includes a lease agreement that requires the tenant or lessee to pay a portion of
the taxes, fees, and insurance, and to be responsible for maintenance activities
allocable to the portion of the property rented by the tenant.
