[quote]Generally, this means each rental real estate enterprise (a rental property or group of similar rental properties, including K-1 rental income) must satisfy these requirements:
1. Each enterprise has its own books and records to track income and expenses;
2. At least 250 hours of rental services are performed per year per enterprise; and
3. (Starting with tax year 2019) Contemporaneous records of services performed are kept which includes who performed the service, description of service, the date of the service, and how long it took (who, what, when, and how long).[/quote][/quote]
I don’t think these bars are high at all. They are certainly lower than the bars set to claim you are a real estate professional that allows you to pass through your rental income losses completely to offset income from other sources… That , the IRS stipulates you must spend at least more than 50% of your time to managing your real estate plus other stringent tests.
The bulk of QBI seems to be documenting you actually spent more than 250 hours with handling your real estate. That’s roughly 12% of a normal person’s 40hr/week job.
One might not spend 250 hours on one property, but I am fairly confident that I spent well more than that across all my properties..
For each property, you should already be tracking expenses anyway, and for tax purposes , you should be tracking mileage and time spent dealing with all sorts of things…. I think the only thing is how do you define your REEE? Do you define a seperate REEE for each property, all properties, or some combination there of?
Also, there doesn’t appear to be any requirement that you need to hold the property in specific entities like an scorp, ccorp, LLC, at least not from what I read so far….
