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QBI deduction for farmland rental ?

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    QBI deduction for farmland rental ?

    1 An elderly customer lives in her house on 82 acres that her family had formerly farmed - about 50 years ago.
    She now rents 42 of the acres for a flat annual fee to a neighboring farmer. I have been putting this on an "E".
    Doesn't seem to qualify for the safe harbor - the time it takes her to cash the monthly rent checks is all that's involved.

    2 A different customer's parents (in another state) both died last year. The family farm was divided among the four siblings.
    One of them has taken over the farm & each sibling rents their share of the land to him.
    My customer is not involved in the operation of the farm, spends no time on it & gets a 1099 from her sib. I put the rent on an "E".

    Was wondering if I'm handling this right. Might they qualify for QBI ? Thanks for comments

    #2
    We would report this on Form 4835, which then would flow to Schedule E. And with your factual pattern, we would not consider it to be qualified QBI. The income is more like investment income than trade or business.

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      #3
      IMO, this does not qualify to be reported on 4835, but on Schedule E. I agree probably does not qualify for QBI based on OP.

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        #4
        Totally agree with DoubleO rent is for the lad and not based on any production crops, livestock etc. belongs Schedule E

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          #5
          I don't see any way this situation would qualify for a Form 4835.
          In the simplest of terms, as described it is simply "land rent" which belongs on a Schedule E. The real property taxes on that rental portion of the acreage could be used as an offsetting expense.
          If the people receiving any of the "rent" reside in a different state, the possibility of filing a non-resident tax return might become an issue.

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