Rental QBI requirements for book keeping and time calculation

[Corey G.]

I am doing my taxes and had a few questions about QBI. I own 16 units (4 Buildings) and manage them myself. I have maintenance done monthly and repairs come up all the time. I am coordinating the repairs, sometimes doing them myself, and actively managing everything that comes up. From my understanding there are 3 main components to be able to take this deduction. 

"Separate books and records are maintained to reflect income and expenses for each rental real estate enterprise."

"250 or more hours of rental services are performed annually with respect to the rental enterprise. Note that these hours of service do not have to be performed by you personally."

"The taxpayer maintains contemporaneous records, including time reports, logs, or similar documents, for: (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. Such records are to be made available for inspection at the request of the IRS. The contemporaneous records requirement does not apply to the 2018 tax year."

1. That being said, I do keep separate books with rental income and expenses but I think I need to be better with showing purchase dates and where expenses get charged. Like "balancing the books" like we did in accounting class. I forget what that is called.

Example: Purchase home depot for 60.25 / Citibank credit card charge for 60.25 = equation balances. Is that necessary or overkill?

2. I'm pretty sure I have 250 hours total across all properties but need to document it. Most of the tenants reach out to me through text message. How would I calculate the time I spend on this activity? I'm thinking from the start of the text until the end of the text thread that same day? Does that sound reasonable even if the actual texting part is quick but it takes the tenant a long time to text back?

[Natalie Kolodij]

This is only if you're using the safe harbor related to the QBI deduction which is honestly- one of the stupidest things to be released. 

If your rentals rise to the level of a trade or business per IRC 162 then you likely qualify without it. 

IRC 162 basically words it as continuous and regular involvement in the activity with the intent to profit. 

The MAJORITY of tax professionals I know far prefer utilizing this to the safe harbor as there are a number of drawbacks associated with it. Extremely disappointed the new BP tax book basically said the safe harbor was the only method. 

Search for some other posts here on BP and you'll see that every tax pro on here is taking the stance of the majority of rentals qualifying via 162 without the safe harbor.