Welcome back! Ask questions, get answers, and join our large community of tax professionals.
- Topics
- Training
- Community
- Product Help
- Industry Discussions
- User Groups
- Discover
- Resources
Turn on suggestions
Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type.
Showing results for
- Intuit Accountants Community
- :
- ProSeries Tax
- :
- ProSeries Tax Discussions
- :
- Rental Activities - Qualified Trade or Business
Rental Activities - Qualified Trade or Business
Options
- Mark Topic as New
- Mark Topic as Read
- Float this Topic for Current User
- Bookmark
- Subscribe
- Printer Friendly Page
sharpcougar
Level 3
09-30-2022
01:36 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Can someone educate me on whether I need to check the box on "Is this activity a qualified trade or business" on schedule E for a tax payer that has 2 rental houses? She has a full time job but she also manages these 2 properties on her own.
Solved! Go to Solution.
Labels
1 Solution
Accepted Solutions
TaxGuyBill
Level 15
09-30-2022
01:56 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
There is no clear-cut answer and depends on the facts-and-circumstances. Tax professionals who have spent DAYS researching court cases, rulings, etc. still may disagree with each other if it rises to the level of a "trade or business" or not.
The IRS has a "Safe Harbor" for this. PART of that Safe Harbor is if there is 250 hours a year spent on the rental activity. The 250 hours includes any time the taxpayer spends on it, and well has anybody that they hire to work on the property (for example, repairs, improvements, bookkeeper, etc.).
If a person qualifies for the Safe Harbor, the IRS would not question the fact if it rises to the level of a "trade or business".
A rental activity certainly can qualify as a "trade or business" if less than 250 hours are performed. However, I personally use the 250 hours as a guideline. For example, if 200 hours were performed, it very well could qualify. If only 50 hours were performed, it seems very unlikely to me that it would qualify. But again, there is no clear-cut answer and it depends on the facts-and-circumstances.
1 Comment 1
TaxGuyBill
Level 15
09-30-2022
01:56 PM
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
There is no clear-cut answer and depends on the facts-and-circumstances. Tax professionals who have spent DAYS researching court cases, rulings, etc. still may disagree with each other if it rises to the level of a "trade or business" or not.
The IRS has a "Safe Harbor" for this. PART of that Safe Harbor is if there is 250 hours a year spent on the rental activity. The 250 hours includes any time the taxpayer spends on it, and well has anybody that they hire to work on the property (for example, repairs, improvements, bookkeeper, etc.).
If a person qualifies for the Safe Harbor, the IRS would not question the fact if it rises to the level of a "trade or business".
A rental activity certainly can qualify as a "trade or business" if less than 250 hours are performed. However, I personally use the 250 hours as a guideline. For example, if 200 hours were performed, it very well could qualify. If only 50 hours were performed, it seems very unlikely to me that it would qualify. But again, there is no clear-cut answer and it depends on the facts-and-circumstances.
