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Residential Real Estate QBI: 2019 schedule B of Form 8995-A.

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TP has 3 rental residential real estate and is claiming safe harbor rules under Rev Proc 19-38.

TP is completing Form 8995-A because the taxable income is over the threshold.

Does TP need to complete Schedule B of f 8995-A? Does TP need to aggregate when all the 3 rentals are residential property in order to meet Rev Proc 19-38?

Thanks for your time and comment.

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Level 15

Is TP qualifying with 250 hours on each rental separately, or collectively?

In the QBID section of each rental there is an input for "Rental real estate enterprise number if claiming safe harbor" You may use the same number for all (collectively) or a new number for each rental (separately). 

Here is the info for that field from Lacerte

"Enter the rental real estate enterprise number to claim the safe harbor treatment under Rev. Proc. 2019-38. To be eligible, separate books and records must be maintained for each property, 250 or more hours of rental services must be performed, and the property may not be rented under a triple net lease agreement."

 

Aggregation is a different animal. Input for it is a bit lower and have more parts. Here is the Lacerte help for aggregation number

"Enter a number to aggregate two or more businesses. All businesses with the same number will be aggregated together.

NOTE: SSTBs may not be aggregated. See Publication 535 for more information."


ex-AllStar

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Highlighted
Level 15

Is TP qualifying with 250 hours on each rental separately, or collectively?

In the QBID section of each rental there is an input for "Rental real estate enterprise number if claiming safe harbor" You may use the same number for all (collectively) or a new number for each rental (separately). 

Here is the info for that field from Lacerte

"Enter the rental real estate enterprise number to claim the safe harbor treatment under Rev. Proc. 2019-38. To be eligible, separate books and records must be maintained for each property, 250 or more hours of rental services must be performed, and the property may not be rented under a triple net lease agreement."

 

Aggregation is a different animal. Input for it is a bit lower and have more parts. Here is the Lacerte help for aggregation number

"Enter a number to aggregate two or more businesses. All businesses with the same number will be aggregated together.

NOTE: SSTBs may not be aggregated. See Publication 535 for more information."


ex-AllStar

View solution in original post

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@George4Tacks  thanks a lot your comments.

FYI, TP qualified more than 250 hours.

 I got mixed up between aggregration and netting.  The TP has a netting situation. Property A and B had net income but property C had a loss so TP needs to complete Sch C (not Sch B) of f8995-A.

Since all the 3 properties are rental real estate, I will combine all three into 1 rental real estate enterprise as per your comment. This is ok right?

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