New rules for a 20% tax deduction on rental properties published by IRS as 199A Safe Harbor.

What you need to know: 
The Safe Harbor applies to taxpayers who have "an interest in real property held for the production of rents and may consist of an interest in a single property or interests in multiple properties."

KEY - Safe Harbor allows rental real estate enterprises to receive a 20% qualified business income deduction for tax purposes.

If an interest fails to satisfy the requirements of the Safe Harbor, it's still possible to qualify for the 199A deduction by otherwise meeting the definition of a trade or business as set forth in 199A.


Some Notes:

• Multiple Properties - If a taxpayer has an interest in multiple properties, commercial & residential properties can't be combined for the deduction.
• "Mixed Buildings" - In a single building with both residential & commercial purposes (e.g., a storefront with apartments above), property owners have 2 options; 1) treat the property as a single rental real estate enterprise; or 2) separate the interest into both residential & commercial interests. 
• Less Flexibility - Taxpayers also can't change the forms of their interests from year-to-year (i.e., filing multiple properties as a single interest one year, and then filing them as separate interests the next).

Safe Harbor Requirements:

1. Separate books & records are maintained to reflect income for expenses for each rental real estate enterprise;
2. Records should reflect 250+ hours of rental services for each year;
3. Records should also reflect time logs (or similar documents) that show: (i) the amount of hours for all services performed; (ii) descriptions of all services performed; (iii) dates when the services were performed; & (iv) names of persons/companies performing the services; and 
4. A statement attached to a filed original return that outlines the information about the real estate enterprise(s) & why the deduction is being sought by the taxpayer. 

LANDLORDS: Keep logs of rental services and receipts to see if you qualify for the Safe Harbor deduction.

ATTENTION RESIDENTIAL LANDLORDS

On October 3, 2019 Governor Cuomo signed bill A2118 into law, mandating that for all leases moving forward, landlords must accept lease termination notices for tenants living with a "disability" as defined by law, or for the spouse or dependent of a tenant with a disability, should the tenant need to relocate to one of the following:

• An adult care facility;
• A residential health care facility;
• Subsidized low income housing; or 
• A residence of a family member.

More discrimination lawsuits are on the horizon in NYC based upon the City's Commission of Human Rights new enforcement guidelines concerning immigration status and national origin.

Landlords, merchants, and employers now face up to $250,000 in fines for using terms and phrases like "illegal alien", "alien", and "speak english" when used in the context meant to demean, humiliate, or offend.

In their press release, the NYC Commission of Human Rights provided hypothetical examples of discriminatory behavior, including:

• Harassing a restaurant patron because of their accent;
• Refusing repairs on a unit occupied by an immigrant family and threatening to call ICE if they complain;
• Paying a lower wage or withholding wages to workers because of their immigration status; and
• Harassing a store customer by telling them to stop speaking their language and demanding they speak English.

*ATTENTION LANDLORDS AND EMPLOYERS* - your teams must be trained in the different forms of discrimination and harassment to avoid fines, lawsuits, and bad publicity.

Super Lawyers Recognized 4 Attorneys from Lieb at Law, P.C. for 2019 Honors. Only 2.5 percent of the lawyers in the state are named to Super Lawyers Rising Stars. Congratulations to Dennis Valet, Andrew Matthew Lieb, Steven M Siliato and Mordechai Yankovich.

https://www.superlawyers.com/about/selection_process.html

NYC COMMERCIAL LANDLORDS BEWARE! 

Discrimination lawsuits are coming if your teams are not trained to comply with the new NYC commercial tenant harassment laws. 

On 9/25/19, the New York City Council increased commercial tenant harassment fines to a minimum of $10,000 a maximum of $50,000—a ten fold increase from the previous fines that ranged from $1,000 to $10,000. 

The bill passed by the Council also expands on the definition of "tenant harassment" to include: 

• Requesting identifying documents that would disclose the citizen status of a tenant;
• Threatening a tenant based on factors including age, race, gender, disability status, or sexual orientation; and 
• Unreasonably refusing to cooperate with a tenant's permitted repairs or construction activities. 

This expands on the prior prohibitions of denying utility services, removing tenant property, limiting a tenant's access to space, or repeatedly engaging in frivolous lawsuits against tenants. 

Landlords, before taking action in tenant disputes, you should have your teams trained on the different forms of discrimination and harassment to avoid hefty fines.