Generally, a rental property does not carry the time requirements to be considered as eligible for qualified business income deduction (QBID).
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Generally, this means each rental real estate enterprise (a rental property or group of similar rental properties, including K-1 rental income) must satisfy these three requirements:
- Each enterprise maintains its own books and records to track income and expenses.
- An enterprise that has existed less than four years performs at least 250 hours of rental services per year. For an enterprise in existence for four years or more, this test needs to be met for any three of the five consecutive taxable years ending with the taxable year.
- (Starting with tax year 2019) Contemporaneous records of services performed are kept which includes who performed the service, description of service, the date of the service, and how long it took (who, what, when, and how long).
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