Have income from rental properties you own? You may be eligible to take a juicy tax break: The 20% qualified business income deduction. Subject to a litany of rules, self-employed individuals and owners of S corporations, partnerships and LLCs can write off 20% of their qualified business income. QBI is your allocable share of income less deductions from a trade or business. It doesn’t include wages, dividends, capital gain or loss, interest income, etc. Eligible filers take the break on their 1040 return. Applying the QBI rules to rentals is thorny. The rental activity must generally rise to the level of a trade or business. For this purpose, IRS regs refer to the standard under federal tax code Section 162, the statute that generally governs the deductibility of trade or business expenses. There is no statutory or regulatory definition of a Section 162 trade or business. Instead, this determination is based on a taxpayer’s specific facts and circumstances.