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Level 5
March 8, 2026
Question

Question about QBI safe harbor

  • March 8, 2026
  • 11 replies
  • 93 views
Hi, I am TurboTax ask me if I am eligible for the QBI safe harbor. One of the condition that I must met is Performed 250 hours or more in rental services across all properties (by you or hired workers)
I hired a management agent to do this work for me. According to some online information, they is considered as "hired workers". How should I know prove that 250 hours then? 
 
Thanks in advance

11 replies

Mike9241
Level 15
Level 15
March 8, 2026

This is the issue I see in claiming the QBI safe harbor, especially when using a management company. It's logical to assume they would hire whoever is needed to perform repairs, maintenance, and other work on the property. Whether they get the info in note A is unknown. Talk to them to see what they can provide. 

 Maintain contemporaneous records

The IRS requires you to document services as they occur—the hours, description of services, dates, and who performed the services—not recreating them at the end of the year. Here are some tips to meet this requirement:

  • Keep detailed notes for each property or building
  • Include dates, type of activity, and time spent (note A)

Attach the annual statement election

To formally elect Safe Harbor treatment, you must attach a statement to your tax return each year, signed by the owner or representative. You can’t elect the Safe Harbor on an amended return unless you have a valid reason for the initial omission.

The statement must include:

  • A description (including the address and rental category) of all rental real estate properties included in each RREE.
  • A representation that the requirements regarding separate books and records, the 250-hour rule, and contemporaneous records have been met.
  • A signature by the taxpayer (or an authorized representative) declaring under penalties of perjury that the statement is true.

 

Here's an example that I think meets the rule for contemporaneous records. You hire a landscaper for a property. At the end of each month, a bill is submitted with the hours notated. 

 

Mike9241
superlycAuthor
Level 5
March 8, 2026

@Mike9241

 Thanks. "Attach the annual statement election", but Turbox did not ask me to do this? I assume that TurboTax should have me handle all the documents. I am confused here.

PatriciaV
Level 15
March 8, 2026

You should require that all contractors provide evidence of the work they perform and the number of hours they spend working on your rental property. Most professionals in the rental industry understand this requirement and should have processes in place to provide the documentation you need.

 

For your personal hours, keep a record of all the following:

  • advertising to rent or lease the real estate;
  • negotiating and executing leases;
  • verifying information contained in prospective tenant applications;
  • collection of rent;
  • daily operation, maintenance, and repair of the property, including the purchase of materials and supplies;
  • management of the real estate; and
  • supervision of employees and independent contractors.
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superlycAuthor
Level 5
March 8, 2026

@PatriciaV 

The management company do all the advertising and negotiation stuff. They like a company, people there work full time to handle all their clients' properties during the year. Is there a typical name for the document, otherwise I hardly believe a company like this kept record on how much time they spent on for each of their client. 
How is this practically handled?