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


Instructional Method

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
Prior knowledge of Real Estate Taxes.

Advance Preparation

Registration Options
Regular Fee $59.00

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