I have a client who owns two rental properties.  He replaced carpeting throughout the house.  This is an improvement that normally cannot be expensed, and must be depreciated over 27.5 years.   however, it is my understanding that if he makes a safe harbor election under 1.263 (a) (3h), then he, he would be able expense the cost of carpeting.   I have made that election on proseries professional, (and this property is not his business; he has "active" participation, but not material participation).   So, when I make that election on software, I was expecting the expensing of carpeting cost to be allowed, but it is not. 

When I then next indicate that this is a qualified trade or business, the expensing of carpeting is still not allowed.   I thought the safe harbor under 1.263(a) (3H) has nothing to do with QBI, and instead is based on value of rental property being less than 1 million.   What is going on here, and what am i doing or understanding incorrectly.