Jack Woods

 

Central Business Solutions 

301 Lynnfield Street, P.O. Box 3169 Peabody, MA 01960

 

Phone:  978-532-0266

Fax:      978-532-9105

 

1147 Main Street, Suite 213, P.O. Box 299 Tewksbury, MA 01876

 

Phone: 978-851-8044

Fax:     978-851-9332

 

Email: jack@cbps.com

January 2020

Real Estate & QBI

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The IRS issued a final ruling explaining how to qualify for a real estate income safe harbor to receive the Qualified Business Income (QBI) deduction. You will need to make this safe harbor determination annually.


Qualifications
To qualify for a safe harbor for a real estate rental income deduction under section 199A, taxpayers must meet all of the requirements stated in this final ruling. They include maintaining separate books for each enterprise and keeping contemporaneous records, including time report logs and similar documents. You’ll also need to provide the description, hours and dates of all services performed and who performed them.


Hourly Rules
Rental real estate enterprises in existence for fewer than four years must have performed 250 or more hours of rental services per year. Those in business longer must meet this standard in three of the five previous years.


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