IRS Regulations were just finalized in January 2019 for Rental Property Investors. Safe Harbor rules are relaxed for 2018. After reviewing the regulations the best news for rental property owners is for 2018 there is no need for contemptuous records to claim the 199A 20% deduction. However, safe harbor guidelines in 2019 will require bookkeeping and time record keeping reports. You can still claim the 20% deduction, however you must keep the records to satisfy safe harbor rules. If you own multiple properties then you must keep separate records for residential holdings and commercial real estate. If you hold triple net leases you will not be eligible for the new section 199A 20% deduction.
Vacation homes will not qualify if you or your family lived in the property any time during the year. If you have rental losses, then your loss could reduce your other pass-through 20% deductions. For owners who have losses there will be no deduction. The losses from the rental activity will limit the deduction on profitable activities that otherwise would qualify for a full 20% deduction.
Confused? If you have questions contact your accountant or tax professional. The link to the full article is below.