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Level 3
February 6, 2024
Question

QBI Enterprise

  • February 6, 2024
  • 3 replies
  • 25 views

Hi!  I have two short term rentals.  When I net them together I pretty much have $0 profit.  I have 250 hours for each of them on their own...not that it really matters.  Do I need to combine these as one enterprise?  It seems even if I say both are individual that TurboTax wants me to combine them into one enterprise.  Is there a disadvantage to this in the future?

3 replies

Level 15
February 6, 2024

If you are claiming that your rental activities are a qualified business then you are already treating them as one enterprise.  There is no advantage or disadvantage to joining them together or keeping them separate other than tracking income and expenses.  

 

@taxesaretaxing123 

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Level 3
February 7, 2024

@RobertB4444  Thanks so much!  With 2 short term rentals for material participation, can I:

(1) combine the hours spent on both units (to meet the spent more time than anyone else) and/or the 500 hour requirement 

(2) if I show material participation, then I shouldn't have to pay NIIT, correct?

Level 15
February 7, 2024

Correct on both counts.

 

@taxesaretaxing123 

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