Safe Harbor for Real Estate Rentals
Author: Greg White
||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
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.
- Revenue Procedure 2019‐38 — Safe Harbor
- 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
- Self Rentals → SSTBs
- Basis, At‐Risk and Passive Carryovers
- Passive Owners
- 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
NASBA Field of Study
Taxes (2 hours)
Prior knowledge of Real Estate Taxes.