Can't efile because of QBI Rental Real Estate Enterprise Statement

[Bao_CA]

I totally agree with you.  I am hitting the same issue.  Have been using TT for years, and now this becomes a point breaker for me.  

I am starting to research for a different tax software.

[Boris P]

Same here, very frustrating.  TurboTax please fix this or for Tax 2021 I will be looking elsewhere.  Printing 100+ pages for filing sucks and should NOT be required in 2021.

[Bao_CA]

I found a work around that is acceptable for me, but not sure if it is OK for the others.  Instead of selecting Safe Harbor/QBI, I select just only QBI.  This allows me to e-file.  Somehow, by selecting Safe Harbor/QBI, the QBI is unable to e-file. Turbo Tax needs to address this bug or provide a reasonable explanations.  Now, I am OK with selecting only QBI because I did not see much differences in savings between Safe Harbor/QBI comparing to just QBI.  So, you may want to verify at your end to see if it is acceptable.

[Bao_CA]

My workaround is to select QBI only.  Do not select Safe Habor/QBI.  

Once I de-select Safe Habor, then selecting QBI, I was able to efile.  Make sure to check for saving differences between Safe Habor and QBI only.

Good luck.

[honem]

I'm very interested in this potential solution. Can you give more specifics about where you were able to de-select Safe Harbor, then select QBI? I can't figure out how to do this.

[Bao_CA]

Will send pictures of the steps later tonight.

[Bao_CA]

After you have entered all your income & expenses for Real Estate, then it should take you to a page saying "Do you want to use a safe harbor to qualify this property for a deduction?" Under this page, you should see three options to select.  One of them is safe harbor.  Do not select that.  For me, I select None of these apply.  Then you will hit continue.

On the next page, you should see "Is this Qualified Business Income?", along with two options to choose.  I chose Yes, this income is QBI. Then you hit continue.

The following page should say "Let's cover some uncommon situations", along with three options to choose.  I skipped this because it is not applicable to me.

The next page should be "Does this business receive income from specified services?" You would choose Yes, or No on this page.

The next page should be "Does this business receive income from specified services business with common ownership?" Answer either Yes or No.

The last page should be a summary of your QBI savings.  You should be able to E-file after this.

[Boris P]

Thank you, that seemed to work for me.  Numbers jumped all over the place while re-classifying properties but in the end after all were done were exactly the same.   This saved me a ton of hassle

[honem]

Thank you so much for posting your work-around. My concern is that if managing your rental properties does not truly qualify for QBI outside of the safe harbor allowance, because it's not technically a trade or business, then if you were to get audited, you might not be able to take the deduction. IRS definition: The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services.  From another source - The courts and the IRS look at the facts and circumstances determine whether an activity is a trade or business. Specifically, they look at a number of factors including:

• the manner in which the taxpayer carries on the activity;

• the expertise of the taxpayer or his or her advisors;

• the time and effort expended by the taxpayer in carrying on the activity;

• the expectation that assets used in the activity may appreciate in value;

• the success of the taxpayer in carrying on other similar or dissimilar activities;

• the taxpayer's history of income or losses with respect to the activity;

• the amount of occasional profits, if any, that are earned; the financial status of the taxpayer; and

• elements of personal pleasure or recreation

[claire_p]

Thank you, Bao!

[christufts]

hey turbo tax - printing returns is complete nonsense. wtf?

[mblungmblung]

@Bao_CA    Thanks for the workaround! Made absolutely zero difference for me!

[debrarichard]

Thank you so much for sharing this work around!!!  I dreaded the thought of filing a paper return. (This is so much like being in the dinosaur age to do this).  Removing the safe harbor didn’t change my numbers and since I’m claiming a loss, I wasn’t able to use the QBI deduction this year anyway.  Thank you, thank you!!!

[ga30]

I've actually been super impressed with TurboTax download after switching over from H&R Block. HOWEVER, I agree with you that this lack of e-filing the statement is a dealbreaker! In 2019, H&R Block download version did allow me to e-file while simply prompting me to print the statement. I wondered how they allowed e-file and not TurboTax?

Now I have a possible way forward. H&R Block in person will e-file my return and they will attach the signed enterprise rental statement. So it looks like I will have to shift to (much more costly) in-person tax preparation after nearly a decade of using the software. 

Does the TurboTax "we prepare your return" option overcome this problem? If so, I would prefer to stay with them.  Regardless, it really makes no sense that the IRS and TurboTax permit digital signatures on everything but this. I had to mail my 2020 return to the IRS and they have no idea when it will be completed. Without this, you can't get a tax transcript or otherwise prove you filed your taxes when trying to refinance or buy a home. 

Here's hoping TurboTax full tax preparation option at least will match H&R Block's. If not, I wasted all that time porting over my 2019 information into TT 2020 only to have to leave over this lack of functionality.  

[TISalways]

Have you identified a tax filing software that will work better as relates to this issue with the RREE and Safe Harbor? It is March 2022 and the issue is still a pain in my backside.  My fault though for buying yet another year of Turbo Tax Business.