20% pass through deduction

[Andrew S.]

Happy Friday fellow investors, I own 8 rental units and am preparing my taxes for 2019. I self manage my properties, make the repairs, interview tenants, etc. I've recently learned about the 20% pass through deduction and it seems like there's a gray area if rentals qualify as a business for this rule. I do meet the 3 rules below, so I believe I can qualify for this deduction. My taxable income does not exceed the limit around $200k. 1.Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise; 2.250 or more hours of rental services are performed per year with respect to the rental enterprise; and 3.The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, regarding the following: (i) hours of all services performed; (ii) description of all services performed; (iii) dates on which such services were performed; and (iv) who performed the services. This requirement will not apply to taxable years beginning prior to January 1, 2019. Curious if other self managing investors have been taking this deduction? I haven't met with my CPA yet this year, so it'll be discussed with them. Thanks much, Andrew

[Steven Hamilton II]

IGNORE THE SAFE HARBOR.  Your rentals qualify if you are treating it as a business with a profit motive. It is actually detrimental. 

Tax Court Case: Hazard v Commissioner discusses rentals being considered a business.