Whom should we be issuing the 1099 if we have Schedule E rental activity that does qualify for trade or business based on final 199A regulations. And the other questions is, what if taxpayer has a partnership rental activity that does not qualify for 199A deduction but his Schedule E does qualify. Hoe to separate the two to derive a correct number on line 9 of 1040 QBI.
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If you are going to claim QBID, prevailing opinion is that the landlord must have issued 1099's to anyone he paid over $600 to in cash or check who is not inc. This was not required before if they were maintaining the rental as passive income (pass through from E to 1040). As far as the partnership goes the QBID can come from schedule E."Dude, you are correct" Rapid Robert -
Does anyone knows that if taxpayer takes QBI deduction in 2018 on rental property as trade or business, does he have to take that deduction in future years too or he can opt out on years? Since he has rental losses in 2019 but other business has ordinary income that is not SSTB and he does not want to net the two in order to maximize his QBI.Comment
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The decision to take QBI should be consistent from year to year, otherwise, you could draw an IRS audit and have to explain how the rental was a trade business one year, then not a business the next.Comment
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