Level 3

199A QBI & Self-Rental to wholly-owned S-Corp?

Forum|Forum|6 years ago
April 22, 2020
1 reply
8 views

Husband & wife own a commercial building that is leased to an S-Corp wholly-owned by wife. Under Notice 2019-38, is this considered self-rental and therefore NOT allowed as a QBI deduction to husband & wife on their MFJ return?

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T

Terry53029

Intuit Community Champion

Seems as if they do qualify. From IRS question and answers. Here is link: https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-provision-11011-section-199a-qualified-business-income-deduction-faqs

Q17. If someone is a real estate professional, will their rental real estate qualify for the deduction?

A17. The deduction is not based on whether the taxpayer qualifies as a real estate professional under section 469. Rental real estate may constitute a trade or business for purposes of the QBI deduction if the rental real estate:

Rises to the level of a trade or business under section 162,
Satisfies the requirements for the safe harbor provided by Rev. Proc. 2019-38, or
Meets the self-rental exception (i.e., the rental or licensing of property to a commonly controlled trade or business conducted by an individual or RPE).

Q17. If someone is a real estate professional, will their rental real estate qualify for the deduction?

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