Posts filed under the Rental Income and Passive Loss Rules category.

Qualified Business Income Deduction for Rental Real Estate Owners-Safe harbor rule

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The 2017 Tax Cuts and Jobs Act (TCJA) created a new deduction known as the Qualified Business Income Deduction (QBID). It is also called the pass-through deduction or Section 199A deduction. The QBID allows small  business owners to deduct up to 20% of qualified business income from federal income tax. Rental property owners will interested in the safe harbor rule of the section 199A qualified business income deduction (QBID) for their rental property.

Taxpayers that have income (or loss) from rental property will not be eligible for the QBID when they hold the property for investment purposes.

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Cash Flow from Rental Property

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Real estate investment may focus on potential appreciation. But real estate market is in such uncertainty that it is impossible to kown know if or when appreciation in value will come. Wise investors are most interested in cash flow.

A rental property investor will collect rent checks, pay the bills, and watch their bank accounts. But the cash flow may not be that simple with consideration of tax issues on income and loss from the rental property.

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