How do I remove the Section 199A Rental Real Estate Safe Harbor Statement?

[alingane]

Hi,

I have multiple rental properties, and somehow one of them incorrectly got the Rental Real Estate Safe Harbor Statement generated for it.

Try try and troubleshoot, I've done this:

1) I've gone through and removed the property from QBI (answered the question that it does not qualify for QBI) but that didn't remove the Safe Harbor Statement from the final return.  But, I do believe the property qualifies for QBI based on reviewing the TurboTax guidance which suggests that even without having documentation of 250 hours that (based on case history) some rental operations could still quality for QBI. But I don't want to sign the form that says I spent 250 hours because I don't have the time documented (and I don't think it'd reach that threshold).

2) I've removed the property from the aggregation of local rental properties. Not only did not not remove the Safe Harbor statement, but now I can't figure out how to add it back to the aggregation. Any advice on how to do this?

3) I changed my answer from yes to no for the question of materially participating, but this did not remove the Safe Harbor statement. The actively participate question is whether I own at least 10%, and that I made major management decisions for the property such as approving tenants and authorizing repairs (both of which are true). 

None of my troubleshooting attempts have worked, so I'm turning to this community in the hopes someone can give me some tips.

Thanks in advance!

Alison

[Jane95128]

I have the same problem. I would not have answered incorrectly in the first place if the 250 hours had been included in the information about qualifying. 

[Irene2805]

To delete the Section 199A Rental Real Estate Safe Harbor Statement please follow these steps:

First remove the "trigger" for the form:

TurboTax Online:

1. Go into the section of the return for your rental property. 
2. On the screen Your 2020 rentals and royalties summary, click Edit next to the selected property.
3. On Here's [xxx]'s rental property info, scroll to the Qualified Business Income section and click the Edit box.
4. On the next screen, Do you want to use a safe harbor to qualify this property for a deduction, mark the radio button next to None of these apply,
5. Click Continue,

TurboTax CD/Download:

1. Go into the section of the return for your rental property.  On the screen Your 2020 rentals and royalties summary, click Edit next to the selected property.
2. On the Review Your [XX] Rental Summary, scroll to the bottom of the screen and click Done with Rental Property.
3. Continue to the screen, Do you want to use a safe harbor to qualify this property for a deduction, mark the radio button next to None of these apply,
4. Click Continue,

Now you can delete the form using these steps:

TurboTax Online:

1. While in your return, click on Tax Tools > Tools (in the black bar at the side of your screen).  
2. In the Tools Center, under Other helpful links click on Delete a form.
3. Click Delete next to Schedule E Worksheet (x) -- Safe harbor stm and follow the onscreen instructions. 
4. Once you have finished deleting the desired form(s) click the Continue with My Return box (in the lower right of your screen).

TurboTax CD/Download:

1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar. 
2. In the Forms in My Return list on the left, click Safe harbor stm.
3. Click on the Delete Form box at the bottom of the screen.
4. To return to the interview, click on the Step-By-Step icon in the top right of the blue bar.  

[alingane]

Thank you so much for reply and the detailed instructions! I'll give it a shot (fingers crossed 🙂 ).

Alison

[Jane95128]

Thank you. This solved the problem. 😊

[alingane]

This seems to have worked on my end as well, thank you again!

For anyone else needing to do this, on my version of TurboTax (downloaded 2020 Home and Business for Mac), in order to delete the form, I had to find then select the form in Forms mode, then go to the Forms menu bar at the top and select "Remove [form name]." I didn't have the option of a delete button at the bottom of the screen. I appreciated that TurboTax had a warning step that required me to confirm my selection before it actually deleted the form.

Alison

[sqa9999]

I do not see delete buttons at the bottom of any forms. I am using turbotax premier.

Also you say "

1. Go into Forms Mode by clicking on the Forms icon in the top right of the blue bar. "

Also Forms icon is on the left top and not on top right.

[BillM223]

alingane's instructions were for the download version of the software (a he/she noted).

For the Online product, you would look to the left for Tax Tools and click on it, then click on Tools underneath it, then click on Delete a form in the center of the screen.

Does that work for you?

@sqa9999

[galenbiochemist]

How do I remove the QBI rental real estate safe harbor statement?

[SForrestLO]

@galenbiochemist

You can search for schedule E or C or a K-1 entry in your program and if you find one that you don't need, you can delete the form 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 the form in the list of forms and click on the option to delete it

You can also view your form 1040 in the online TurboTax product to see if you can tell where the QBI is coming from by following these steps:

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

2. Click on "Tools"

3. Click on "View Tax Summary"

4. On your left menu bar find the "Preview my 1040" option and click on it

[modester]

I had a Section 199A Rental Real Estate Safe Harbor Statement generated.  I did not elect or select this.  I have seen others post with same problem and saw reply explaining how to delete the form - HOWEVER, I have already submitted my tax return and electronically filed.  Do I need to do anything after the fact / Will this effect anything for 2020 or in the future regarding this rental property?  What concerns if any should I have? 

[DianeW777]

No, if you had a loss on your rental there is has no affect on your tax return for 2020.  You can answer the questions differently next year because it's an annual question.

If you had a profit on your rental property then you may have used the qualified business income deduction for 2020,  you can decide if you need to amend your return based on your decision.

• Can I get the QBID for rental income? 

The IRS finalized the safe harbor rules for rental properties.

This safe harbor is available for taxpayers who seek to claim the section 199A deduction with respect to a "rental real estate enterprise." Solely for purposes of this safe harbor, a rental real estate enterprise is defined as an interest in real property held to generate rental or lease income. It may consist of an interest in a single property or interests in multiple properties. The taxpayer or a relevant passthrough entity (RPE) relying on this revenue procedure must hold each interest directly or through an entity disregarded as an entity separate from its owner, such as a limited liability company with a single member.

The following requirements must be met by taxpayers or RPEs to qualify for this safe harbor:

1. Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise.
2. For rental real estate enterprises that have been in existence less than four years, 250 or more hours of rental services are performed per year. For other rental real estate enterprises, 250 or more hours of rental services are performed in at least three of the past five years.
3. The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: hours of all services performed; description of all services performed; dates on which such services were performed; and who performed the services.
4. The taxpayer or RPE attaches a statement to the return filed for the tax year(s) the safe harbor is relied upon.

[BigDonS]

Thanks for the detailed instructions, everything went smoothly until I got to the spot where I was supposed to delete the safe harbor statement in the box at the bottom of the page.  I looked around and then found under the forms tab at the top a command to "remove the safe harbor statement".  I clicked on that and it disappeared.  I looked at few other form pages and discovered that the remove command was there for other pages too.  Now I know how to clean up (carefully) some errant pages that end up in the return.

Thanks again,

Don