Safe Harbor for Real Estate Rentals

Author: Greg White

CPE Credit:  2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC

Breaking Developments: Brand New Safe Harbor for Real Estate Rentals (Rev. Proc. 2019-38) and §199A for Rental Real Estate (including triple net leases) outside the safe harbor. We’ll take a comprehensive, deep dive into which rentals qualify (and which might not qualify) for the 20% §199A QBID.

We’ll have extensive coverage of just released Revenue Procedure 2019-38 including:

  • Can you amend 2018 tax returns to claim the new safe harbor?

  • What types of properties are excluded from the safe harbor?

  • What are the new types of excluded properties.

  • What were the changes from Revenue Procedure 2019-7?

  • How were the record keeping requirements relaxed?

  • What happens if you don’t meet the safe harbor?

Publication Date: December 2019

Designed For
New and experienced CPA’s who practice in the tax area or who need a better understanding of the tax law for other areas of practice.

Topics Covered

  • Revenue Procedure 2019‐38 — Safe Harbor
  • Grouping
  • Separate Books and Records
  • Safe Harbor Requirements
  • Qualifying Services
  • Contemporaneous Record Keeping
  • Triple Net Lease Exclusions
  • Effective Date
  • Just a Safe Harbor — Don't Have to Meet for §199A QBID
  • Threshold Question
  • Do RE Rentals Qualify for QBID?
  • Chief Distinction ‐‐ Jurisdictions
  • Rental RE: Tax Court Good Cases
  • Important Guidance — Triple Nets
  • Rev. Rul. 60‐206: Is it Too Big a Leap?
  • IRS Seems Unsure
  • Substantial Authority
  • Tax Risk
  • Form 8275
  • Triple Net Leases and the 2nd Circuit
  • Rentals and 1099s
  • Answers to Common Questions
  • Ambiguity
  • Self Rentals → SSTBs
  • Basis, At‐Risk and Passive Carryovers
  • Passive Owners

Learning Objectives

  • Identify case law and administrative law support for taking the QBID on triple net leases
  • Recognize and apply the requirements of the IRS's "safe harbor" for rental property
  • Identify how to complete the IRS form that reduces the risk of preparer penalties
  • Identify special risk issues for taxpayers who reside in the Second Circuit (Connecticut, Vermont and New York)
  • Recognize which property type qualifies for Safe Harbor
  • Describe which factor is used to determine if rental real estate is a business in IRS Section 199
  • Recognize when Form 8275 should be filed
  • Identify which Form should be issued to unincorporated vendors
  • Describe grouping and it's advantages
  • Identify basic requirements to claim a deduction for business expenses as defined in Section 162
  • Describe when passive owners can quality for QBID activity

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Prior knowledge of Real Estate Taxes.

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $59.00

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