 20% Landlord Tax Deduct'n (by TonyT [PA]) Feb 20, 2019 1:45 PM
 20% Landlord Tax Deduct'n (by S i d [MO]) Feb 20, 2019 1:59 PM
20% Landlord Tax Deduct'n (by Richard [MI]) Feb 20, 2019 2:02 PM
20% Landlord Tax Deduct'n (by 6x6 [TN]) Feb 20, 2019 2:19 PM
20% Landlord Tax Deduct'n (by MikeA [TX]) Feb 20, 2019 2:28 PM
20% Landlord Tax Deduct'n (by JB [OH]) Feb 20, 2019 3:23 PM
20% Landlord Tax Deduct'n (by Ray-N-Pa [PA]) Feb 20, 2019 4:06 PM
20% Landlord Tax Deduct'n (by Beth [WI]) Feb 20, 2019 5:42 PM
20% Landlord Tax Deduct'n (by John... [MI]) Feb 20, 2019 6:10 PM
20% Landlord Tax Deduct'n (by John... [MI]) Feb 20, 2019 6:14 PM
20% Landlord Tax Deduct'n (by John... [MI]) Feb 20, 2019 6:16 PM
20% Landlord Tax Deduct'n (by MikeA [TX]) Feb 20, 2019 6:33 PM
20% Landlord Tax Deduct'n (by Busy [WI]) Feb 20, 2019 6:43 PM
20% Landlord Tax Deduct'n (by MJ [PA]) Feb 20, 2019 6:55 PM
20% Landlord Tax Deduct'n (by John... [MI]) Feb 20, 2019 7:18 PM
20% Landlord Tax Deduct'n (by MikeA [TX]) Feb 20, 2019 8:38 PM
20% Landlord Tax Deduct'n (by AccidentalRental [NJ]) Feb 21, 2019 2:31 AM
20% Landlord Tax Deduct'n (by Marv [IL]) Feb 21, 2019 5:04 AM
20% Landlord Tax Deduct'n (by Chris [CT]) Feb 21, 2019 1:52 PM
20% Landlord Tax Deduct'n (by 6x6 [TN]) Feb 22, 2019 10:02 AM
20% Landlord Tax Deduct'n (by Sue [MI]) Feb 22, 2019 1:46 PM
20% Landlord Tax Deduct'n (by Wilma [PA]) Feb 22, 2019 2:02 PM
20% Landlord Tax Deduct'n (by Sal [PA]) Feb 22, 2019 2:49 PM
20% Landlord Tax Deduct'n (by 6x6 [TN]) Feb 22, 2019 3:43 PM
20% Landlord Tax Deduct'n (by MJ [PA]) Feb 22, 2019 4:58 PM
20% Landlord Tax Deduct'n (by MikeA [TX]) Feb 23, 2019 6:29 AM
20% Landlord Tax Deduct'n (by Sandy [CO]) Feb 23, 2019 2:17 PM
20% Landlord Tax Deduct'n (by Marv [IL]) Feb 24, 2019 7:16 AM
20% Landlord Tax Deduct'n (by Johnny B. [MA]) Feb 24, 2019 7:22 AM
20% Landlord Tax Deduct'n (by TonyT [PA]) Posted on: Feb 20, 2019 1:45 PM
Message:
I just talked to a CPA today and he told me that Landlords DO get the QBI 20% deduction!
So on Line 9 of your 1040 form, enter (and deduct) 20% of your Rental Real Estate Profits from schedule E.
I didn't even know about the deduction and it's HUGE! I'll be getting $4000 MORE of a refund than I thought.
I already filed and used H&R Block's software which really let me down because it did not include this MASSIVE deduction. I called H&R Block and they said that the deductin will be integrated into their software as a download patch on Feb 22. WOW! Would they have sent everyone an email explaining that we lost out of $4000? ...because of their mistake? That's another topic, I guess.
I just wanted everyone to know you get to deduct 20% of your Rental Income on line 9 of your 1040 form. Triple Net Leases types do not qualify, but common residential rentals do. --73.52.xx.xxx |
20% Landlord Tax Deduct'n (by S i d [MO]) Posted on: Feb 20, 2019 1:59 PM
Message:
Glad to hear it!
For this year, file an amended return. Doesn't cost much. I had to do one a few years ago when I forgot to include rental mileage, and he only charged me an extra $30. --173.20.xxx.xxx |
20% Landlord Tax Deduct'n (by Richard [MI]) Posted on: Feb 20, 2019 2:02 PM
Message:
Thanks for the info! --23.121.xx.xxx |
20% Landlord Tax Deduct'n (by 6x6 [TN]) Posted on: Feb 20, 2019 2:19 PM
Message:
Thank you for sharing. --73.120.xx.xxx |
20% Landlord Tax Deduct'n (by MikeA [TX]) Posted on: Feb 20, 2019 2:28 PM
Message:
There are some requirements you have to meet, the biggest is that you need to document that you spend 250 hours managing the property each year (you get free pass for 2018 since the rules didn't com out until 2019).
Here's the link to the IRS publication if you want to read more. irs.gov/pub/irs-drop/n-19-07.pdf --50.26.xx.xxx |
20% Landlord Tax Deduct'n (by JB [OH]) Posted on: Feb 20, 2019 3:23 PM
Message:
Check with your accountant, there are a lot of exceptions that you cant use. For example if the property is depreciated out, no count. If it is a triple net lease , no count. Income limitations, Etc. We all thought that we were going to use the deduction from several experts all year until the IRS published their rules just recently. A lot of bad news for people. We alone are losing $40,000 deduction we had planned on with two properties. Oh, well...The price of living in the land of the free. --24.123.x.xxx |
20% Landlord Tax Deduct'n (by Ray-N-Pa [PA]) Posted on: Feb 20, 2019 4:06 PM
Message:
That was based on an opinion letter that came out about three weeks ago. I would have liked to have it down as law but since the IRS were the folks that issued it, it should be good for at least this year.
--72.23.xxx.xx |
20% Landlord Tax Deduct'n (by Beth [WI]) Posted on: Feb 20, 2019 5:42 PM
Message:
I read that the 250 hours on the properties does not have to be work YOU do. It can be work that others do. So... you have a new roof put on... that’s 50 or 100 hours or more... you are paying for that labor and those hours count towards the 250 hr. You pay a property management company... those hours count as well. --47.12.xxx.xx |
20% Landlord Tax Deduct'n (by John... [MI]) Posted on: Feb 20, 2019 6:10 PM
Message:
MikeA: How do you figure on the free pass for 2018? You still need the 250 hours, right? The document you linked specifically states that DOCUMENTING those hours aren't required for 2018, but that would imply that meeting the requirement of 250 hours is still required, right?
- John...
--96.40.xx.xx |
20% Landlord Tax Deduct'n (by John... [MI]) Posted on: Feb 20, 2019 6:14 PM
Message:
The IRS guidance states that you have to have 250 hours of "rental services" to qualify. It then goes on to list what that means (advertising, lease negotiation and signing, verifying apps, collecting rent, daily operation and maintenance/repair, management, materials buying, and supervision of employees or contractors). It then goes on to say that that those services can be performed by the owner, employees, agents, or contractors and still count. So, in some cases, YES, those do seem to count. Very interesting.
- John...
--96.40.xx.xx |
20% Landlord Tax Deduct'n (by John... [MI]) Posted on: Feb 20, 2019 6:16 PM
Message:
For those interested, it says that it does NOT include these things:
"The term rental services does not include financial or investment management activities, such as arranging financing; procuring property; studying and reviewing financial statements or reports on operations; planning, managing, or constructing long-term capital improvements; or hours spent traveling to and from the real estate."
--96.40.xx.xx |
20% Landlord Tax Deduct'n (by MikeA [TX]) Posted on: Feb 20, 2019 6:33 PM
Message:
John,
Read on down to page 8. It says "The contemporaneous records requirement will not apply to taxable years
beginning prior to January 1, 2019." I am assuming that they added this statement since the document was not published until 2019 well after the end of the 2018 tax year. --50.26.xx.xxx |
20% Landlord Tax Deduct'n (by Busy [WI]) Posted on: Feb 20, 2019 6:43 PM
Message:
Easiest way for me to document hours is with my mileage log. I just use a spiral notebook, so, I can record whatever in there.
Not nice that time spent on capital improvements doesn’t count. That’s quite a chunk of my time. --70.92.xxx.xxx |
20% Landlord Tax Deduct'n (by MJ [PA]) Posted on: Feb 20, 2019 6:55 PM
Message:
This is from the IRS.Gov website and 1040 instructions booklet:
Qualified business income deduction. Beginning in 2018, you may be able to deduct up to 20% of your qualified busi-ness income from your qualified trade or business, plus 20% of your qualified REIT dividends and qualified PTP in-come. The deduction can be taken in ad-dition to your standard deduction or itemized deductions. For more informa-tion, see the instructions for line 9 and Pub. 535
Sounds good to me. --76.125.xxx.xxx |
20% Landlord Tax Deduct'n (by John... [MI]) Posted on: Feb 20, 2019 7:18 PM
Message:
MikeA: That's what I was saying. You still need the 250 hours to qualify for 2018 -- they just aren't requiring the "contemporaneous records" for 2018 to prove it.
- John...
--96.40.xx.xx |
20% Landlord Tax Deduct'n (by MikeA [TX]) Posted on: Feb 20, 2019 8:38 PM
Message:
Sorry, I reread my first post and I left out the word "documented" 250 hours for 2018.
--50.26.xx.xxx |
20% Landlord Tax Deduct'n (by AccidentalRental [NJ]) Posted on: Feb 21, 2019 2:31 AM
Message:
Do I understand this correctly? Time spent supervising capex improvements counts towards the 250 hours but the contractor's time doing the capex improvements don't count? --73.248.xxx.xxx |
20% Landlord Tax Deduct'n (by Marv [IL]) Posted on: Feb 21, 2019 5:04 AM
Message:
All the above applies to the "Safe Harbor Rule". You still may qualify for the QBID 20% even if you do not apply for the safe harbor.
To get the safe harbor for 2018 you must sign a statement and attach it to the 2018 tax that says you did qualify and spent the 250 hours.
In 2019 you will need to keep a contemporaneous log of your hours.
But again, this only if you wish to claim the safe harbor. You can still take the 20% deduction if you feel you think your rental rises to the level of a business. --173.15.xx.xxx |
20% Landlord Tax Deduct'n (by Chris [CT]) Posted on: Feb 21, 2019 1:52 PM
Message:
I know about it I need it, my construction business made to much money last year...I'll be getting a nice reaming April 15!! --24.45.xxx.xx |
20% Landlord Tax Deduct'n (by 6x6 [TN]) Posted on: Feb 22, 2019 10:02 AM
Message:
Okay. Nothing new but now I am confused.
I only have 1 sfh, so would I be allowed to get the discount? --73.120.xx.xxx |
20% Landlord Tax Deduct'n (by Sue [MI]) Posted on: Feb 22, 2019 1:46 PM
Message:
My cpa is saying it has to be a BUSINESS as in I would have to pay social security taxes on the earnings in order to deduct the 20% pass through. What are you guys hearing? --97.84.xxx.xxx |
20% Landlord Tax Deduct'n (by Wilma [PA]) Posted on: Feb 22, 2019 2:02 PM
Message:
I really appreciate this discussion, folks. Especially the BUSINESS designation. I don't run the rentals separately, as I'm too small. I REALLY don't want to deal with S.S. taxes! --71.175.xxx.xxx |
20% Landlord Tax Deduct'n (by Sal [PA]) Posted on: Feb 22, 2019 2:49 PM
Message:
Sue, your CPA is wrong.
Having rental property is a business.
If you are a small time landlord, and rent out residential real estate (single family houses, duplexes, etc.), and manage them yourself you don't pay social security taxes on the earnings. You are entitled to deduct the 20% pass through because of the new tax law.
--98.115.xxx.xx |
20% Landlord Tax Deduct'n (by 6x6 [TN]) Posted on: Feb 22, 2019 3:43 PM
Message:
I am amazed at how many cpa's have different answers.
You would think all cpa's would have the same answer because they are trained and schooled to know the tax laws right?
--73.120.xx.xxx |
20% Landlord Tax Deduct'n (by MJ [PA]) Posted on: Feb 22, 2019 4:58 PM
Message:
CPAs do not know everything. I am the only real estate client of my CPA so I taught him a few things. Most other customers of his are retail business owners so he knows good about payroll, inventory etc. I went to the local IRS tax office today. You can get publications and expert advice on taxes there. I tell my CPA what taxes to file and what deductions to apply. I give him all the HUD statements each year for properties that I bought and sold. --76.125.xxx.xxx |
20% Landlord Tax Deduct'n (by MikeA [TX]) Posted on: Feb 23, 2019 6:29 AM
Message:
When I gave the IRS document to my CPA she told me that since it is so new that she didn't hear anything about it in the update training she received in December. I suspect a lot of CPA's are going to get caught off guard since the info was released so late and they don't typically do anything except customer work between January and April. --192.168.xxx.xxx |
20% Landlord Tax Deduct'n (by Sandy [CO]) Posted on: Feb 23, 2019 2:17 PM
Message:
Our CPA said we qualified for the QBI and our tax bill went from $4000 to $800. --75.70.xx.xxx |
20% Landlord Tax Deduct'n (by Marv [IL]) Posted on: Feb 24, 2019 7:16 AM
Message:
You do not have to pay SS on a rental for it to be considered a business for 199A.
There is a new designation for a rental that rises to the level of a business. Now it is called an "enterprise".
Google "final regulations 199A" --173.15.xx.xxx |
20% Landlord Tax Deduct'n (by Johnny B. [MA]) Posted on: Feb 24, 2019 7:22 AM
Message:
For those interested the updated (15th edition) of NOLO Every Landlords Tax Deduction Guide has a great write up on this topic that will easily allow you to determine if you qualify. The book is available on Amazon. --24.147.xx.xxx |
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