topic My rental property is an unqualified rental. I don't qualify for Safe Harbor deduction since I do not meet the 250hrs limit. How come TurboTax applied it?is that correct? in Investors & landlords

My rental property is an unqualified rental. I don't qualify for Safe Harbor deduction since I do not meet the 250hrs limit. How come TurboTax applied it?is that correct?

mr-krich — Thu, 04 Mar 2021 00:33:27 GMT

Did Turbotax incorrectly apply Safe Harbor?

Re: My rental property is an unqualified rental. I don't qualify for Safe Harbor deduction since ...

MarilynG1 — Thu, 04 Mar 2021 02:14:32 GMT

If you indicated in the Rental Property Info section that you 'actively participate' in your rental activity, you may have qualifed for the Safe Harbor Election.

Or, in the QBI questions, when asked if you 'own more than 10% and make management decisions' if answered yes, you are considered an 'active participant'.

You can Delete the Safe Harbor Election forms from your return.

Click this link for more info on Safe Harbor Elections.

This link gives instructions on How to Delete a Form in TurboTax Online.

Re: My rental property is an unqualified rental. I don't qualify for Safe Harbor deduction since ...

mr-krich — Thu, 04 Mar 2021 03:59:18 GMT

Hi @MarilynG1 Marilyn, thanks for the answer! That is helpful but does that mean that I am getting deduction that I should not be getting? What I am allowed to deduct from rental if I choose unqualified and not to elect safe harbor?

Re: My rental property is an unqualified rental. I don't qualify for Safe Harbor deduction since ...

MarilynG1 — Fri, 12 Mar 2021 20:17:50 GMT

In actuality, you probably are an 'active participant' and can claim all deductions/credits related to your Rental Property.

The 250 hours does not have to be performed by you; it includes services performed by others on your behalf; a property manager, repair and upkeep performed by others, etc.

Click this link for more info on Rental Property Active Participation.

A rental property is normally only considered 'unqualified' for any period of time it was designated 'for personal use' or rented below average rental rates.

Here's more info on Non-Qualified Rental Property.

[Edited 3/12/2021 | 1:08 pm]