I am renting both, domestic and foreign single family homes to tenants. The properties are held by pass-through entities and are reported on Schedule E. The activity is managed from a US-location and, based on the recently established 199A safe harbor requirements, the rental business that is aggregated from multiple single family rentals is a qualified business for 199A purposes.
However, one item remains unclear: In order to be considered Qualified Business Income, foreign income must be "effectively connected with the conduct of a trade or business within the U.S.". Does the income from foreign rental property that is managed from a US-location meet this requirement?
Thank you for your thoughts on this issue.