☰
✕
Sign In

Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Returning Member
posted Jan 23, 2022 12:13:46 PM

Qualified Business Deduction

Turbo Tax is giving me this deduction and I'm questioning whether or not it is valid.

 

I receive an income, shown on a 1099-Misc, for rental property I inherited.   I am not a business, but the property is rented to a business.  I have 50% ownership.    I do nothing for this income,  just receive a monthly check.

 

Should I get this deduction?

0 4 563
4 Replies
Expert Alumni
Jan 23, 2022 12:31:47 PM

A qualified business is any business that provides services (with a couple of exceptions).  For purposes of this rule the IRS has said that rental real estate income does qualify for a QBI deduction and is treated as a business for that purpose.  So yes, you should qualify for this deduction based on the information that you have provided.

Returning Member
Jan 24, 2022 7:39:54 AM

thank you

Returning Member
Jan 25, 2022 11:31:44 AM

  1. If you rent your property under a “net-net-net” lease where the tenant pays for all expenses (other than the note on the building), then you do not qualify for QBI.
  2. If you rent your property to a business you own at least 50% of, then you do qualify for QBI (except for SSTB’s defined below). So a building you own that collects rent from a restaurant you own qualifies for QBI (even if it is a “net-net-net” lease).

I do NOT own a percentage of the business.   I only own a percentage of the property.    Could you confirm that I should get the QBI?

Expert Alumni
Jan 25, 2022 2:12:30 PM

You may be excluded from qualifying for the QBI Deduction.

 

Click this link for more details on QBI for Rental Property.