401k withdrawal, cares act, overnight rental

[Zach Tarwater]

Will loss of rental income from my overnight rental qualify me for the penalty free 401k distribution?  I had two or three months of less than average rentals and one month of no rentals due to Covid travel restrictions. 

[Linda Weygant]

My reading of the CARES Act indicates that in order to qualify, you or a member of your household must have been directly affected by COVID in one of a few ways:

1 - Diagnosed with COVID
2 - Work furlough, hours reduced, salary cut due to COVID
3 - Unable to work because school/childcare was unavailable due to COVID
4 - Job accepted, but unable to start due to COVID

All of my readings indicate that loss of income is directly related to Earned Income - Employment or Self Employment.

Lack of rental income is essentially a poorly performing investment and is not related to Active or Ordinary Income.  In my opinion, this matches the nature of investment - there are risks and rewards and investors are meant to weather one and reap the other.