Tax question about using QBI - Do I need use aggregated business?

[Brian Sohmers]

I own many SFH rentals and when preparing my 2020 taxes, learned about the 20% qualified business income (QBI) deduction. Yay! I think I need to use the aggregated business safe harbor in order to meet all requirements, namely the 250 service hour requirement, since I don't meet the 250 hours for each individual property but do meet it in aggregate. Does anyone else have experience using this safe harbor and am I interpreting it correctly?

Also, on Schedule B form 8995-A the IRS asks to "Provide a description of the aggregated trade or business and an explanation of the factors met that allow the aggregation in accordance with Regulations section 1.199A-4." Any advise on how to best answer this question is appreciated. Thank you in advance!

[Ashish Acharya]

Originally posted by @Brian Sohmers:

I own many SFH rentals and when preparing my 2020 taxes, learned about the 20% qualified business income (QBI) deduction. Yay! I think I need to use the aggregated business safe harbor in order to meet all requirements, namely the 250 service hour requirement, since I don't meet the 250 hours for each individual property but do meet it in aggregate. Does anyone else have experience using this safe harbor and am I interpreting it correctly?

Also, on Schedule B form 8995-A the IRS asks to "Provide a description of the aggregated trade or business and an explanation of the factors met that allow the aggregation in accordance with Regulations section 1.199A-4." Any advise on how to best answer this question is appreciated. Thank you in advance!

20% deduction doesn’t benefit you if there is a net loss. Do you have a net loss? If you do, it will decrease your other QBI income. And, in the future, if you buy new properties that generate losses and you also have other QBI activities, your QBI deductions for Will disappear as you can’t just back out of QBI losses easily. 

Blank election might hurt. 

If not, yes aggregate. Once you aggregate, the statement will most likely automatically get generated and attached.