Are You Missing Out on a 20% Tax Deduction Because of How You Title Your Rental?
Since the Tax Cuts and Jobs Act, many landlords have access to a major tax break: the QBI deduction (Qualified Business Income). But here’s the kicker—you might not be getting it if your rental isn’t structured right.
What Is the QBI Deduction?
It allows eligible landlords to deduct up to 20% of their net rental income. But to qualify:
You must treat your rental as a business (i.e., meet the “250-hour rule” or show significant activity)
You might need to hold the rental in an LLC or other pass-through entity
LLC vs. Personal Ownership
LLC Benefits: Liability protection, pass-through taxation, easier partnerships, QBI eligibility
LLC Downsides: Higher insurance rates, lender scrutiny, sometimes unnecessary for single rentals
If you hold your property personally, you might still qualify—but the IRS is stricter, especially if you show passive intent.
Pro Tip: If you co-own property with a family member and file jointly, you might be able to elect Qualified Joint Venture status for simpler QBI filing.
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