Does a new rental property count as QBI qualified for tax purposes?

Thanks for the info! I'm curious about the 250+ hours requirement. Does that have to be the property owner personally, or can it include time spent by property managers, contractors, etc.?

The 250+ hours can include time spent by you, employees, contractors, and property managers - basically anyone providing services to your rental business. This includes activities like maintenance, repairs, collecting rent, finding tenants, and even time spent reviewing statements and paying bills. For the contemporaneous records requirement, you'll need to maintain logs, time reports, or similar documentation showing dates, hours, and descriptions of all services performed. Many rental property owners fail to qualify simply because they don't keep adequate records of their activities.

Did it actually give you specific guidance on the 250+ hour requirement? I'm having trouble figuring out what activities count and how to document them properly.

Sounds interesting but how does it compare to just talking to a tax professional? I've been burned by online tax tools before that gave me incorrect information.

Yes, it provided very specific guidance on the 250+ hour requirement, breaking down exactly which activities count toward the total and suggesting a simple tracking system. It even created a template for me to use for ongoing documentation that would satisfy IRS requirements. For comparison with tax professionals, I actually found it more helpful than my CPA because it gave me consistent answers and explained the reasoning behind each conclusion. My accountant kept going back and forth on whether my properties qualified, but taxr.ai clearly explained the specific court cases and IRS rulings that applied to my situation. It's not replacing professional advice, but it definitely helped me understand the complex QBI rules better.

How does this actually work? Is it just an appointment service or something? I didn't think anyone could get you through IRS phone lines faster.

This sounds like complete BS honestly. The IRS doesn't have any special numbers or backdoors. How could a third-party service possibly get you through faster than calling directly? And even if you did get through, IRS phone reps often give conflicting information.

It's not an appointment service - they use an automated system that navigates the IRS phone tree and waits on hold for you. When an agent finally answers, you get a call back and are connected directly to that agent. They don't have any special "backdoor" - they're just doing the waiting for you instead of you having to stay on hold for hours. I understand the skepticism - I felt the same way. But IRS agents can absolutely provide specific guidance on documentation requirements and what activities qualify. The key is asking very specific questions rather than general ones. In my case, I needed clarification on exactly what rental activities counted toward the 250-hour requirement, and the agent provided that information based on the revenue procedure guidelines.

Thank you for bringing up the income thresholds! My total income will be around $135,000 this year, so it sounds like I'd be under the phaseout range. Is there any difference in how the QBI works for real estate versus other types of businesses? And do you know if having an LLC makes it more likely to qualify?

At $135,000 you're definitely below the threshold, so no phaseout concerns for you. Real estate is treated somewhat differently for QBI purposes - the main distinction is whether your rental activity is considered a "trade or business" or just an investment activity. The LLC structure alone doesn't automatically make your rental qualify for QBI. The IRS looks at the actual substance of what you're doing regardless of how it's structured. That said, having a proper business structure with separate accounts, formal leases, and professional management practices helps support your case that it's a true business. The best approach is to carefully document all time spent on rental activities (by you or contractors), maintain detailed records, and consider electing to group all your rental properties together as a single enterprise if you have multiple properties. This can help you meet the 250-hour requirement more easily.

I claimed QBI for my short-term rentals last year and got a notice from the IRS asking for documentation of my hours. I sent them my activity logs and invoices from contractors, and they accepted it without further questions. The key was having detailed records that showed exactly when work was performed and by whom.