250 hour document
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250 hour document (by Hoosier [IN]) Nov 22, 2020 1:05 PM
       250 hour document (by Hoosier [IN]) Nov 22, 2020 1:07 PM
       250 hour document (by Allym [NJ]) Nov 22, 2020 2:42 PM
       250 hour document (by WMH [NC]) Nov 22, 2020 3:24 PM
       250 hour document (by Ray-N-Pa [PA]) Nov 22, 2020 6:35 PM
       250 hour document (by Dee Ann [WI]) Nov 22, 2020 10:48 PM
       250 hour document (by Tm [IN]) Nov 22, 2020 11:36 PM
       250 hour document (by Hoosier [IN]) Nov 23, 2020 1:43 AM
       250 hour document (by Hoosier [IN]) Nov 23, 2020 1:46 AM
       250 hour document (by Pat [VA]) Nov 23, 2020 6:01 AM
       250 hour document (by TM [IN]) Nov 23, 2020 7:46 AM
       250 hour document (by Wmh [NC]) Nov 23, 2020 8:34 AM
       250 hour document (by Wmh [NC]) Nov 23, 2020 8:34 AM
       250 hour document (by Wmh [NC]) Nov 23, 2020 8:34 AM
       250 hour document (by WL [CA]) Nov 23, 2020 8:56 AM
       250 hour document (by Marv [IL]) Nov 23, 2020 8:58 AM
       250 hour document (by Hoosier [IN]) Nov 23, 2020 9:52 AM
       250 hour document (by Wilma [PA]) Nov 23, 2020 12:51 PM

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250 hour document (by Hoosier [IN]) Posted on: Nov 22, 2020 1:05 PM
Message:

When the tax law was passed awhile ago (I think 2018, not sure), they put in a requirement to document that you spend 250 hours on each "rental enterprise" to get the 20% QBID deduction. I started documenting this at the beginning of the year...but wonder how others are doing this. Are you doing on a spreadsheet or is there an IRS form? For those with multiple "enterprises", are you considering combining some things? The requirement is "per enterprise", so if you have multiple LLCs for example and don't spend 250 hours on each, you might have an issue. I don't have that issue...all ours are in one LLC. Also, what details are you capturing? I have date, hours, which property, and notes about what was done. Some of the hours are for all properties such as balancing the checkbook or updating rent rolls...so I just say "all" for those items.

--99.92.xxx.xxx




250 hour document (by Hoosier [IN]) Posted on: Nov 22, 2020 1:07 PM
Message:

.oops --99.92.xxx.xxx




250 hour document (by Allym [NJ]) Posted on: Nov 22, 2020 2:42 PM
Message:

I started just writing on the calendar but covid messed everything up because i could not go into apartments to do the little things I needed to do. I just gave up on it and will probably have to pay but I do have some net operating losses from this year so maybe that will help. --71.104.xx.xxx




250 hour document (by WMH [NC]) Posted on: Nov 22, 2020 3:24 PM
Message:

The 250-hour thing has always been there if you want to designate yourself an RE Professional (which has nothing to do with being a broker or Realtor, it's a tax designation.) It was particularly hard to claim if you also hold down a 40-hour W2 job. That's 20 hours per month, which is a lot if you also have a job.

But if you are a full-time landlord with multiple properties, it's almost a given. That's *only* 20 hours per month, we spend a LOT more time than that on our biz.

Anyway, you can elect to combine all properties together for tax purposes like this, I don't know the form - your CPA should be doing this for you. --50.82.xxx.xxx




250 hour document (by Ray-N-Pa [PA]) Posted on: Nov 22, 2020 6:35 PM
Message:

It is interesting that they use the words "Rental Enterprise".

I don't spend that much time on this as I give myself a small paycheck from my management LLC and put all of that into mu solo 401K. I automatically am a professional since I have active income - and my LLC does an employer contribution of 5% so I gut down on my taxes in that LLC.

Since most of my LLCs are sole member variety, they are considered pass through on my taxes. Most schedule E income is considered pass thru. But if you either schedule C, or issue K1 from a partnership or trust, then I would consider each a different enterprise.

I would go as far, that if you use different investment techniques/strategies, you might be able to challenge the definition - but why? You would only be making it harder on yourself having list the number of hours flipping (which is taxed in short term gains), BRRRRing (which is a long term gain), Air BnB, and Land lording (which doesn't make much gain in 2020 after depreciation). --24.101.xxx.xx




250 hour document (by Dee Ann [WI]) Posted on: Nov 22, 2020 10:48 PM
Message:

We are using a calendar to record the task(s) we do and the building(s). We were able to work through COVID on outdoor projects. Our hours increased as everything took longer due to material shortages. I hired someone to help attract and screen tenants as roomates, which is allowed toward your hours. Contractors you hire are also allowed.

For those of you doing the document, my accountant who worked for the IRS told me the 250 hours have to be for tenant services (if you are a landlord). Recording the rent and depositing rent checks was not considered a service to the tenants. Has anyone else gotten a different interpretation from their accountant? --75.11.xx.xx




250 hour document (by Tm [IN]) Posted on: Nov 22, 2020 11:36 PM
Message:

My acct says I have too. One for my parents FLP which I'm a partner and then my LLC. I have heard another landlords acct say, "you are doing this full time? If yes, dont need it."

NNN leases are exempt or don't count towards your hours. --76.77.xxx.xxx




250 hour document (by Hoosier [IN]) Posted on: Nov 23, 2020 1:43 AM
Message:

.. --99.92.xxx.xxx




250 hour document (by Hoosier [IN]) Posted on: Nov 23, 2020 1:46 AM
Message:

Dee Ann, all research Iíve done says you can count rent collection and check deposits. The things you cannot count are things you do in furtherance of investing, such as researching new properties , arranging financing, and so on.

Here is one article

www.journalofaccountancy.com/news/2019/sep/rental-real-estate-safe-harbor-qbi-deduction-201922135.html

--99.92.xxx.xxx




250 hour document (by Pat [VA]) Posted on: Nov 23, 2020 6:01 AM
Message:

This concerns me a little, as DH said our CPA asked him about this. She asked him about me spending time on the computer & real estate. And he told her "Oh yeah, she spends hours looking for properties, doing research, following the markets".

I'm guessing my time on here should count as continuing education! --71.219.xx.x




250 hour document (by TM [IN]) Posted on: Nov 23, 2020 7:46 AM
Message:

My understanding was if you are doing research/reading, it counts towards the 250. IF you have commercial NNN properties, any time spend on that is a no go. Even if you have to get a lease around, deal with attorneys, meetings, etc.

To be brutally honest, if my accountant ask for one... I'll make up one month of the stuff I do. That would give me my 250 and some... --76.77.xxx.xxx




250 hour document (by Wmh [NC]) Posted on: Nov 23, 2020 8:34 AM
Message:

My DH documents all his time spent on property just so we can remember what he did when and where. He's been doing that for years. So just his spreadsheet alone would cover us but then there's my work on Leases and tenant communications and banking etc. I don't document all of that but it is in my calendar and I could pull together well more than enough hours for myself too. So we are good. --174.226.xxx.xx




250 hour document (by Wmh [NC]) Posted on: Nov 23, 2020 8:34 AM
Message:

My DH documents all his time spent on property just so we can remember what he did when and where. He's been doing that for years. So just his spreadsheet alone would cover us but then there's my work on Leases and tenant communications and banking etc. I don't document all of that but it is in my calendar and I could pull together well more than enough hours for myself too. So we are good. --174.226.xxx.xx




250 hour document (by Wmh [NC]) Posted on: Nov 23, 2020 8:34 AM
Message:

My DH documents all his time spent on property just so we can remember what he did when and where. He's been doing that for years. So just his spreadsheet alone would cover us but then there's my work on Leases and tenant communications and banking etc. I don't document all of that but it is in my calendar and I could pull together well more than enough hours for myself too. So we are good. --174.226.xxx.xx




250 hour document (by WL [CA]) Posted on: Nov 23, 2020 8:56 AM
Message:

I estimate that for each trip to Home Depot to buy repair parts or cleaning supplies for a tenant or apartment is a minimum of one hour to and from the apartment, doing the install, arranging the 24 hour notice . . . . Same for T notices . . . Tally up all your notices and purchases at HD or other LL type stores . . . for your hours --174.65.x.xxx




250 hour document (by Marv [IL]) Posted on: Nov 23, 2020 8:58 AM
Message:

Please remember that the 250 hour rule is just a requirement if you want to be in the "safe harbor".

If you do not keep accurate records and still want to get the QBID deduction you can still take it if you actively manage a property (as opposed to not being active). --67.184.xxx.xxx




250 hour document (by Hoosier [IN]) Posted on: Nov 23, 2020 9:52 AM
Message:

It seems many of us/you will easily get 250 hours, as you are more in the full-time category or own lots of units. I have a relatively small portfolio and although I did spend 250 hours, I could see a year if no tenant turnovers and few repairs that I may not reach it...so in those years I would simply do some extra maintenance. --99.92.xxx.xxx




250 hour document (by Wilma [PA]) Posted on: Nov 23, 2020 12:51 PM
Message:

We have a log for each rental, noting repairs, maintenance, paperwork, etc. We put the "man hours" that we spend in a column on the left and keep a running tally. It's astonishing how quickly you get to 250 hours, especially if you factor in about 2 hours a week of "education and training" (on this forum). --96.245.xx.xx



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