The recently published 199A Safe Harbor Rules for a Rental Business to be considered a Qualified Business, introduce the requirement to log hours worked on certain activities starting with tax year 2019; this is to establish that at least 250 hours of services are being performed with respect to rental-related activities, however, investment activities do not count toward the 250-hour requirement. I have three questions regarding this time log requirement: Does time spent on Accounting and on activities required by the business structure (e.g., LLC membership meetings, reports, etc.) count towards the 250 hours? Does each activity need to be logged with beginning time and ending time or is it sufficient to report hours worked on each day on each type of activity? In a rental business aggregated of several Schedule E Properties, does the log need to identify the specific property each activity was conducted for? Thank you for your response with regards to any of these questions.
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I am renting both, domestic and foreign single family homes to tenants. The properties are held by pass-through entities and are reported on Schedule E. The activity is managed from a US-location and, based on the recently established 199A safe harbor requirements, the rental business that is aggregated from multiple single family rentals is a qualified business for 199A purposes. However, one item remains unclear: In order to be considered Qualified Business Income, foreign income must be "effectively connected with the conduct of a trade or business within the U.S.". Does the income from foreign rental property that is managed from a US-location meet this requirement? Thank you for your thoughts on this issue.
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