Notice 2019-07

independent contractors count toward the 250

Are they really going to log their time for you? Will the rental management company log its time spent managing your rental?

independent contractors count toward the 250

Are they really going to log their time for you? Will the rental management company log its time spent managing your rental?

I never said they would, nor did I comment on how easy it was to meet the record requirements of the safe harbor.

My comment merely stated that it is going to be much easier for the average Mom & Pop landlord to meet the 250 if they can wrap in the rental services of their ICs.

How they document that is between them and their ICs, not me.

So, assume I own a rental property and hire a painter. I meet him at the rental and "supervise/watch" him paint so that I can track his time as well. He spends 5 hours painting, but I spent 5 hours "supervising" him, as well. Sounds like that would be 10 hours spent toward rental services.

Sounds ridiculous, but I think that would be the only way you would be able to track the amount of time contractors spend working on the property.

If the rental activities qualify for QBID as a section 162 Trade or Business, 1099s are required. If the rental activities qualify for QBID by meeting the safe-harbor requirements (but not rising to 162 Trade or Business based on facts & circumstances), are 1099s required?

What bugs me most about this notice is this: why bother? Rental activities that meet these thresholds are already t/b under case law. Complying with this notice adds burdens with very little benefit.

iF ALL THE MANAGEMENT IS HANDLED AND IT DOES NOT TAKE 250 HOURS - IS THE POINT. I think the IRS is trying to say you have an investment and not a trade or business - you have to have 250 - so start mowing the lawn

If the rental activities qualify for QBID by meeting the safe-harbor requirements (but not rising to 162 Trade or Business based on facts & circumstances), are 1099s required?

Yes, see p21 of Preamble of final regs under (e)Taxpayer Consistancy

Apparently, determining QBID, as to whether or not a given rental is a t/b, is made on an annual basis. So, a given landlord may qualify rental property as t/b in 2018 but not in 2019.

Apparently a given landlord may report as t/b, three profitable rentals (for example) and not on two non-profitable rentals. And this may change from one year to the next.

Apparently any carryover negative QBID keeps carrying over from year to year to year until a year is reached when t/b is again established?

"simplification!"

BobA "Apparently, determining QBID, as to whether or not a given rental is a t/b, is made on an annual basis. So, a given landlord may qualify rental property as t/b in 2018 but not in 2019."

Your statement conflicts with Notice 2019-07 p7 "taxpayers may not vary treatment from year to year unless there has been a significant change in facts and circumstances.

BobA "Apparently a given landlord may report as t/b, three profitable rentals (for example) and not on two non-profitable rentals. And this may change from one year to the next."

This is only for tax years starting in 2023. See Notice 2019-07 p 7.

"Your statement conflicts with Notice 2019-07 p7 "taxpayers may not vary treatment from year to year unless there has been a significant change in facts and circumstances."

I understand the notice reads as such, WEISSEA, yes. However, if my landlord "works 260 hours" in 2019, but only 201.5 hours in 2020, apparently the property may cease to qualify as t/b in 2020...... so he should vary or he should not vary the treatment?

I don't really see how this helps anybody. The people who meet the requirements of 2019-07 would never have been on the fence to begin with. What was wanted was a bright line test for taxpayers who might have fallen into a grey area where it was not obvious that the activity rose to the level of a business, and that is not what they gave us.

Rev. Proc. 2019-07 is the most nothing I have seen all in one place so far this year.

BobA "Apparently a given landlord may report as t/b, three profitable rentals (for example) and not on two non-profitable rentals. And this may change from one year to the next."

This is only for tax years starting in 2023. See Notice 2019-07 p 7.

The 3 of 5 referred to in the notice refers to the 250 hours per year, not to profitable or nonprofitable rentals. Prior to 2023 you must put in 250 hours per year every year you use the safe harbor.

You don't actually need 250 hours to otherwise qualify as a T or B, it's just to be able to use the safe harbor to qualify as a T or B.

It really is a fairly useless safe harbor.

The point I'm trying to make exactly.....
"Rev. Proc. 2019-07 is the most nothing I have seen all in one place so far this year."
“It really is a fairly useless safe harbor.”

BUT! The "Safe Harbor" has certainly changed my approach, I was ready to rock 'n roll qbid on each and every E. Now, at least there's a little guidance as to what may be in store. As it turns out, I'll have few who qualify (rentals) vs those who have a small profit and those who have a loss ..... simply not worth the trouble. Therefore, as a preparer I'm thankful for it, it's "useful."

Rev Proc 2019-07 is about letter rulings and determination letters.

Notice 2019-07 contains the rental real estate QBID safe harbor.

Rev Proc 2019-07 is about letter rulings and determination letters.

Notice 2019-07 contains the rental real estate QBID safe harbor.

Yes, Sir. of course....