I'm preparing an individual tax return on ProSeries for husband/wife 50/50 owners of an S corp. The husband is the 100% owner of two single-member LLCs, each of which owns a property that is rented to the S corp. Reg Sec 1.199A-1(b)(14) provides that a self-rental can be treated as a trade or business for Sec 199A. Is there an election statement or some form of disclosure for this? Should I include a statement like the one required by the aggregation regs (Reg Sec 1.199A-4(c)(2))? Does ProSeries include an Aggregation disclosure statement? Thank you.
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Treasury has made no mention of an election statement being required. Since the rental activity is treated as a trade or business by definition, rather than by election, no election statement applies.
When you are on the Schedule E Worksheet for ProSeries Self Rental is choice 7 under Property Type. This is up in the General Information right above the address of the rental.
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I understood the self-rental provisions under Notice 2019-38 to EXCLUDE the QBI Deduction to a husband & wife that own commercial real estate rental and rents the building to an S-Corp that is 100% owned by the wife?? All other criteria for the safe harbor is satisfied, EXCEPT the self-rental provision? Can someone please chime in on this? Thank you.