Since the tax law changes in 2017, there has been some confusion among real estate professional on whether rental real estate enterprises can qualify for the Qualified Business Income deduction in Code section 199A. The IRS recently issued guidance on what type of enterprises qualify for the safe harbor provision. Broadly, a real estate enterprises qualifies for a 199A deduction if:

1. Separate books and records are kept for each enterprise;

2. For tax years prior to 2023, the taxpayer spends at least 250 hours performing rental services (details are in the linked Notice); and

3. The taxpayer maintains contemporaneous records documenting the rental services.

Certain rental arrangements, such as triple-net leases, are exclude from the safe harbor provision. Taxpayers that do not meet the safe harbor requirements can otherwise establish that their enterprise is a trade or business, depending on the facts and circumstances.

If you’re purchasing a rental property, make sure to speak with the attorneys at Levine Law first. Contact us at www.levinelawma.com

Installing solar panels on your home can be a great way to save on bills and reduce your reliance on nonrenewable energy sources. However, purchasing a solar system and having it installed can be a large upfront expense, so many people choose to lease or finance their panels to reduce or eliminate startup costs. 

You should be aware of the potential implications of a solar system lease or financing agreement before you sign a contract. The leasing company may put a lien or Uniform Commercial Code financing statement on your home in order to secure their investment. This may affect your ability to refinance or sell your home, as the lender may require the lien to be removed or satisfied, and the outstanding payments may impact your debt-to-income (DTI) ratio.

Of course, these issues are not insurmountable and can be addressed with the help of Levine Law. If you're thinking of getting solar panels installed, come see us before you sign. www.levinelawma.com