QBI deduction and losses

Technical topics regarding tax preparation.
#1
Ptax  
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Location:
Massachusetts
If I have a client with a rental property that always generates a rental loss and a real schedule C trade or business that makes a profit, do I have to call the rental loss a trade or business and offset that loss against my schedule C income before calculating my QBI deduction?

Can I ignore the rental loss and just calculate my QBi deduction on my schedule C profits?

Further if I have some rental properties with gains and some with losses, can I just call the net income properties trade or businesses and not count the net loss rental properties as trade or business

Has anyone come across where I have to treat my rental as a trade or business? Such as a commercial property rental?
Any opinions?

Thanks
 

#2
makbo  
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In The Counting House
Ptax wrote:Any opinions?

I think Congress intended that you can cherry-pick and mix-and-match any way you want. Otherwise, they would have spent some time putting thought and effort into carefully crafted tax legislation, instead of scribbling last minute changes in the margins of the bill in order to buy the vote of this or that Senator.
 

#3
Noobie  
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Jacksonville, FL
Some questions to solidly rule out the rental as not being a trade or business:
Do you issue 1099s when needed?
Do you keep separate books and records?
Do you spend 250 hours or more managing the rental?
Is it a 100% self rental?

Furthermore, do you have Income under 150k so that you can deduct the rental loss?
 

#4
makbo  
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Noobie wrote:Some questions to solidly rule out the rental as not being a trade or business:
[Are you required to] issue 1099s?
Do you keep separate books and records?

And if the answers to these two are "yes, in profitable years, and no in loss years", would you "rule out the rental as not being a trade or business"?

I'm also curious how you came up with 250 hours as some magical number to determine that an activity is "solidly" not a trade or business. Was there some negative safe harbor issued by the IRS that I missed?
 


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