What are the advantages and disadvantages of having two rentals as aggregated business?

[lameri]

It seems (at least in my case) it is a matter of choice, so I'd like to know what kinds of benefits and problems choosing one vs the other has.

Thanks!

[Anonymous_]

I'll page @Mike9241 for the QBI issue.

[lameri]

@Anonymous_ You will? Thanks.

In any case, it is not QBI (that is not under question), it is the safe harbor part of it. That's where it matters to aggregate or not.

[Mike9241]

 grouping is for determining material participation.  if you do not aggregate and you materially participate in rental 1 but not rental 2 and spends over 750 hours performing services for properties 1 and 2. then property 1 is nonpassive but property 2 is.   on the other hand, if you aggregate both would be nonpassive. the downside is aggregating means that since you have 1 activity any suspended passive losses would not be allowed until both properties are disposed. of.  there are other rules.

here's a link to what material participation is

https://www.investopedia.com/terms/m/material-participation-test.asp