IR-2019-04 Jan 18, 2019 Notice 2019-7 Section 3.06; TP must include a "stmt attch to the return for Sch E rental elect the Safe harbor for 199A. How is this done?

[hughmac]

How is  and where is the section 199A Safe Harbor election letter that is supposed to be attached to the e-filed federal 1040 pro-series return?

[TaxGuyBill · Accepted solution]

ProSeries does not yet have a template for that, so you will need to manually create a document with all of the proper information (including a signature of the taxpayer).

Then you attach the signed document as a PDF to the tax return.

[MrMojo]

Notice 2019-07

Section 3

"03 Safe harbor. 

Solely for the purposes of section 199A, a rental real estate enterprise will be treated as a trade or business if the following requirements are satisfied during the taxable year with respect to the rental real estate enterprise:

(A) Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise;
(B) For taxable years beginning prior to January 1, 2023, 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental enterprise. For taxable years beginning after December 31, 2022, in any three of the five consecutive taxable years that end with the taxable year (or in each year for an enterprise held for less than five years), 250 or more hours of rental services are performed (as described in this revenue procedure) per year with respect to the rental real estate enterprise; and
(C) The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: (i) hours of all services performed; (ii) description of all services performed; (iii) dates on which such services were performed; and (iv) who performed the services. Such records are to be made available for inspection at the request of the IRS. The contemporaneous records requirement will not apply to taxable years beginning prior to January 1, 2019."

".06 Procedural requirements for application of safe harbor. A taxpayer or RPE must include a statement attached to the return on which it claims the section 199A deduction or passes through section 199A information that the requirements in Section 3.03 of this revenue procedure have been satisfied.

The statement must be signed by the taxpayer, or an authorized representative of an eligible taxpayer or RPE, which states: “Under penalties of perjury, I (we) declare that I (we) have examined the statement, and, to the best of my (our) knowledge and belief, the statement contains all the relevant facts relating to the revenue procedure, and such facts are true, correct, and complete.”
The individual or individuals who sign "must" have personal knowledge of the facts and circumstances related to the statement."

ProSeries does Not include a 199A statement for the Safe Harbor for rental properties.
Tax preparers will have to include a separate statement to be attached to the return, efiled or paper filed.