Can't efile 2022 due to QBID safe harbor election

[zumbatax2023]

I've searched for answers regarding this subject as it relates to 2022 returns and  haven't found anything.  There was lots of discussion related to 2021 and prior.  Has Turbotax been updated to allow a PDF attachment that is required for the safe harbor election?  I've always used Turbotax but am very disappointed if this fix has not been addressed for 2022.  What are my options?

Julie N

[MonikaK1]

Please refer to this help article regarding the safe harbor election. TurboTax will generate the De Minimis Safe Harbor Election form and add it to your tax return.

Answer the interview questions that appear in the Rental section and select that you wish to use the safe harbor election. 

IRS Notice 2019-07 establishes a new safe harbor for rental real estate. Individuals and entities owning rental real estate can treat a rental real estate enterprise as a trade or business for QBI purposes if they meet certain requirements. Refer to IRS News Release IR-2019-158 for more information.

If all the safe harbor requirements are met, an interest in rental real estate will be treated as a single trade or business for purposes of the section 199A deduction. 

Note that, if an interest in real estate fails to satisfy all the requirements of the safe harbor, it may still be treated as a trade or business for purposes of the section 199A deduction if it otherwise meets the definition of a trade or business in the section 199A regulations.

Please also see this TurboTax help article for more information.

[zumbatax2023]

TThank you but your answer explained how to quality for QBID (which I know and I do).  I'm trying to figure out how to get Turbo Tax to either include in the forms or allow a PDF attached statement as required to use the QBID safe harbor.  I am preparing a 2022 Form 1040 and Turbo Tax is not doing anything in regards to the required safe harbor statement for a rental property.  I already did a trust Form 1041 with Turbo Tax Business and that package did create the required statement and it was a separate form in the return.  Why does TurboTax Premier not do the same?

[DawnC]

Did you answer the safe harbor questions for the rental in the rental section of TurboTax?   Search for rentals and use the Jump to rentals link to be taken to your Rental and Royalty Summary.   Click on Edit next to your rental property.    Scroll to the bottom and click on Done With Rental Property.   You will then get a question regarding special situations, then be shown a summary of profit or loss.  The next screen will be about the safe harbor.

You can opt for the safe harbor if you prove your rental was a business and not an investment.   It lowers your audit risk plus gives a 20% deduction.   If you qualify, answer YES and any follow-up questions (if you have a real estate enterprise) and click Continue.   You will then be asked to confirm the property type and description.   After that, you should find RREE Statement (1) in your Forms list.   See the image below.

Can I get the QBI deduction on rental income?

[zumbatax2023]

I know I'm qualified and turbotax is calculating and taking the deduction.  I went thru all the steps you indicated but the safe harbor question never is asked.  I am using TurboTax Premier and this is rental income on a Schedule E.  Your example is under business income and expense so maybe there's a difference?  I have to attach the RREE statement to the Form 1040 but thus far, no luck.  Is there a different route to get there for the Form 1040?  Can I add a form to a return?  This is really frustrating and makes no sense the program is not asking about the safe harbor.  It does ask if this is QBI income and I stated yes but no queston on the safe harbor.  

[AliciaP1]

I can't recreate your issue in a test return.  It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

In TurboTax Online, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 

In TurboTax CD/Download versions, go to the black panel on the top of your screen and select Online. 

1. Scroll down to and select Send tax file to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click send through this screen and then you will get a Token number. 

Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.   

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@zumbatax2023 

[zumbatax2023]

I've sent a diagnostic file.  The token number is 1105616.  Thank you!

[AliciaP1]

Upon review, since the rental income is coming from land only and you actively participate, you do not need to claim Safe Harbor to get the deduction.  The income from active participation in rental of land only is QBI on its own.

@zumbatax2023 

[zumbatax2023]

Hello

Everything I've read (and had to attach the RREE statement last year) states the QBID only relates to Schedule C businesses and some rental real estate does qualify (but under the safe harbor rules).  My rental real estate is reported on Schedule E and has to have the safe harbor statement.  I went back (based on your answer) and said No to the active participation (hoping the safe harbor question would come up) but NO questions about safe harbor came up.  Please help me to get the RREE statement to be added to my return.  

[zumbatax2023]

I just replied as to the fact I can't get the RREE statement to appear (no safe harbor questions) even if I remove the active participation yes answer.  I thought I'd attach some information related to why I do need to attach the RREE statement.  I appreciate your help.

In general, income from rental real property held for investment purposes and reported on Schedule E (Form 1040) is not eligible for the QBID. However, you may be eligible for the QBID if you are operating the activity as a real estate business.

There is uncertainty for some as to whether rental real estate qualifies as a trade or business for purposes of the QBID. The IRS has provided a safe harbor under which a rental real estate enterprise will be treated as a trade or business solely for purposes of the QBID.

[AbrahamT]

Follow these prompts in Turbotax

1. Search for Qualified business income deduction and select the Jump to link at the top of the search results to get to the QBID section.

Next, you'll answer questions based on your rental type to determine if it qualifies for the QBID.

1. Select Rentals and royalties (Schedule E) on the Qualified Business Income Deduction Summary screen.
2. Answer Yes to Do you have any income from rentals or royalties?
3. Check any that apply on the Let’s see if you’re a Real Estate Professional screen.
4. Complete the information for your income and expenses.
5. Select Looks good on the Review your (property name) rental summary screen.
6. Select any situations that apply on the Any Other Situations? screen, then select Continue (TurboTax CD/Download only).
7. Answer Do you want to use a safe harbor to qualify this property for a deduction?, then select Continue.
8. Select Yes or No on the Is this Qualified Business Income? screen to complete the interview for your rental property and the QBID.

The questions we ask vary depending on your rental property type.  Here’s an overview of what you can expect:

Self-rental

Other types of rental properties

Real Estate enterprise

None of these apply

Uncommon situations 

[zumbatax2023]

Hi.  I've been given all the steps you just gave me by 2 other EE tax experts.  Turbo tax NEVER asks if I want to use the safe harbor for this property.  The only thing it asked me was if it was QBI income but that looks like the question disappeared when I stated I wasn't actively participating.  I know I qualify under the safe harbor but none of the solutions Turbotax has given me has gotten me to the safe harbor selection.  I need to get my taxes filed ASAP and I paid for the program to provide me what I needed.  Since the program is not doing what you say it should, can someone please call me?