Duplex rental one unit managed by owner, one unit managed by prop mgt. Do I need to split on Sch E since owner managed one may qualify for QBI?

Forum|Forum|6 years ago
December 7, 2019
2 replies
16 views

was reported as one unit in sch E last year.

ProSeries Professional

This topic has been closed for replies.

Best answer by itonewbie

I'd report both on one Sch E so long as your client treats and does manage these as one single enterprise even though management of one unit is outsourced.

For purposes of QBI safe harbor, activities conducted by the owner, employees, agents, and independent contracts are all counted towards the 250-hour requirement. It wouldn't matter if one unit is managed by a property management company but all the other requirements for safe harbor must still be met.

itonewbieAnswer

Level 15

I'd report both on one Sch E so long as your client treats and does manage these as one single enterprise even though management of one unit is outsourced.

For purposes of QBI safe harbor, activities conducted by the owner, employees, agents, and independent contracts are all counted towards the 250-hour requirement. It wouldn't matter if one unit is managed by a property management company but all the other requirements for safe harbor must still be met.

---------------------------------------------------------------------------------Still an AllStar

T

TaxMonkey

Level 7

Hard to imagine a scenario where one would qualify and the other would not, unless you are deliberately trying to set that up because one has losses that you wish to exclude?

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