Eligibility of Rental Income
If you generate rental property income, that income can also qualify for the new deduction, as long as you can show that your rental operation is part of a trade or business. The IRS has released proposed guidelines that include a bright-line test, or safe harbor, for showing that your rental income rises to the level of a trade or business. Under that safe harbor, you can claim the deduction of your rental activities—which include maintaining and repairing property, collecting rent, paying expenses, and conducting other typical landlord activities—if they total at least 250 hours a year. If your activity totals less than that, you can still try to take the deduction, but you’ll have to be prepared to show the IRS that your activity is part of a trade or business.
If you have any questions or would like to begin looking for a rental property, please call me at 214-769-2947. I would love to help you explore increasing your real estate portfolio.
Realtor/Team Lead
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