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dtvedt1965
New Member

What is a "Real Estate Enterprise group"?

This is an error on my schedule E worksheet.  It says I need a group number and that needs additional properties added to it.  How do I fix this?  I tried the instructions, but it is not that simple.  No matter what I do this error keeps haunting me and not letting me file.
10 Replies
JohnB5677
Expert Alumni

What is a "Real Estate Enterprise group"?

I think you're referring to an Enterprise Zone. 

 

Enterprise zones are designated areas of land in which businesses can receive tax incentives in the form of tax exemptions on eligible new investment, when the investment is made in conjunction with a project that includes job creation.

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Grimloktt
Level 2

What is a "Real Estate Enterprise group"?

I do not believe the poster is asking about zone.  I, too, just received the same error message.  It states, "Schedule E Worksheet: Real Estate Enterprise Group Number - Real Estate Enterprise #1 needs additional properties on it.  Add additional properties to Statement #1 or change which Statement this property is report on."

 

Then, it says "Real Estate ent group _______".

 

Thoughts?

Cynthiad66
Expert Alumni

What is a "Real Estate Enterprise group"?

This has to do with the Qualified Business Income (QBI) deduction

 

Under the proposed safe harbor, a “rental real estate enterprise” would be treated as a trade or business for purposes of Sec. 199A if at least 250 hours of services are performed each tax year with respect to the enterprise. The IRS says this includes services performed by owners, employees, and independent contractors and time spent on maintenance, repairs, rent collection, payment of expenses, provision of services to tenants, and efforts to rent the property. However, hours spent in the owner’s capacity as an investor, such as arranging financing, procuring property, reviewing financial statements or reports on operations, and traveling to and from the real estate will not be considered hours of service with respect to the enterprise.

 

A rental real estate enterprise is defined, for purposes of the safe harbor, as an interest in real property held for the production of rents. A rental real estate enterprise may consist of multiple properties. The interest must be held directly or through a disregarded entity. Taxpayers either must treat each property held for the production of rents as a separate enterprise or must treat all similar properties held for the production of rents as a single enterprise. Commercial and residential real estate cannot be combined in the same enterprise.

 

The proposed safe harbor would require that separate books and records be maintained for the rental real estate enterprise. Property leased under a triple net lease or used by the taxpayer (including an owner or beneficiary of a relevant passthrough entity) as a residence for any part of the year under Sec. 280A would not be eligible under the proposed safe harbor.

 

Per @VictoriaD75

Grimloktt
Level 2

What is a "Real Estate Enterprise group"?

Great! So how do I fix this error?

ReneeM7122
Level 8

What is a "Real Estate Enterprise group"?

You can try deleting the form 8995 if you don't qualify for the QBI deduction and that may allow you to e-file your tax return as follows:

 

1. Find the Tax Tools option on your left menu bar and click on it

2. Click on Tools

3. Find Delete a Form and click on it

4. Look for form 8995 in the list of forms and click on the option to delete it

 

@Grimloktt

Grimloktt
Level 2

What is a "Real Estate Enterprise group"?

I believe I do qualify for it. So now how do I fix it?

AmyC
Expert Alumni

What is a "Real Estate Enterprise group"?

Follow these steps:

The QBI should be picking up your sch E rentals. You must have marked that you actively participate (in the property profile section) and select the QBI election.

 

  1. Return to the rentals
  2. Edit each rental
  3. Review property profile
  4. Mark that you actively participated,
  5. click Done with Rental Property.
  6. The program asks Other Situations?, continue
  7. Profit or loss, continue
  8. Do you want to use a safe harbor? Make the election, continue on

 

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dascmo
New Member

What is a "Real Estate Enterprise group"?

I deleted form 8995 and I still get this error. Help!

AmyC
Expert Alumni

What is a "Real Estate Enterprise group"?

If you have rental real estate, you want the 8995.

  1. Go back to your rental property and edit.
  2. Scroll down past property information, income, assets and click done with property. 
  3. Continue
  4. Do you want to use a safe harbor to qualify this property for a deduction?
    • If you actively participate in the rental (that question was in the property profile section) then you can mark none of these apply or
    • if you spend over 250 hours on the rental and keep separate records, mark the top selection-safe harbor for the property on its own.

 

The middle option is the real estate enterprise group which you clearly don't have so it should not be marked.

@dascmo

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Grimloktt
Level 2

What is a "Real Estate Enterprise group"?

Ok. Figured it out. I'm getting an error because turbo tax selected one property as safe harbor and another as real estate enterprise group. You can check the selections by going to income and expenses -> rental properties and royalties -> select one of your properties -> click edit under qualified business income. Here you can make your selections.

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