the IRS does have a safe harbor which if you meet all the requirements means that it is QBI and the IRS can't challenge it
First, the taxpayer must maintain separate books and records that reflect the income and expenses for each rental real estate enterprise. Solely for this safe harbor, a rental real estate enterprise is defined as an interest in real property held to produce rent and it may consist of an interest in a single property or multiple properties. The taxpayer may treat each rental property that it holds as a separate rental real estate enterprise or the taxpayer may treat all their real property as a single rental real estate enterprise for Section 199A deduction purposes. However, commercial and residential real estate may not be part of the same rental real estate enterprise. Once the taxpayer makes this determination regarding the treatment of the rental property, they cannot change it from year to year unless they can demonstrate a significant change in facts and circumstances.
Second, 250 hours of rental services must be performed with respect to the rental real estate enterprise. Rental services can be performed by the taxpayer or by others hired by the taxpayer. For the purpose of this safe harbor, rental services will consist of (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.
Third, starting with the 2020 tax year, the taxpayer will be required to maintain 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. In future years, the IRS may request these records, but for the 2018 and 2019 tax years this provision is not in effect. When the IRS first created the safe harbor with Notice 2019-07, this contemporaneous record requirement was to commence in 2019, but it was delayed to tax years starting after 2019 with the final revenue procedure.
Finally, to utilize this safe harbor the taxpayer must attach a PDF statement to the tax return signed by the taxpayer(s) that states that “Under penalties of perjury, I (we) declare that I (we) have examined the statement, and, to the best of my (our) knowledge and belief, the statement contains all the relevant facts relating to the revenue procedure, and such facts are true, correct, and complete.”
Not meeting all4 requirements doesn't mean it isn't QBI, but the burden of proof shifts to you.
