Are You a Full-Time Real Estate Investor? Maybe not.

Author: Joshua Dorkin • URL: http://www.biggerpockets.com/
March 2nd, 2007 •

Welcome to Real Estate Tax Season!
In an article in the Wall Street Journal, Real-Estate Professionals Say IRS Snares Them by Mistake, we learn that the IRS is watching . . .

Given all the real estate investors and speculators who appeared during the fast fading real estate bubble-boom, the IRS has decided to look closer at real estate professionals. full-time real-estate professionals, defined as someone who spends more than half of his working hours in real estate and more than 750 hours a year tending to real-estate activities, can fully deduct losses — including depreciation, interest expense on loans and property taxes.

But those who don’t fit into that category are typically considered to be “passive” real-estate investors with a limited ability to deduct their losses, says Alan Weiner, a CPA and tax partner at the firm of Holtz Rubenstein Reminick LLP in Melville, N.Y.

Are you a full-time real estate professional?

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5 Responses to “Are You a Full-Time Real Estate Investor? Maybe not.”

Jeff | 3/03/07
Great post, A lot of investors really need to look into this so they may take all of their deductions. This will also keep the IRS off your back if you are a full-time real estate investor.
Bonnie Erickson | 3/03/07
Josh, I need clarification on this. Somewhere I HEARD (that doesn’t mean what I heard is what the expert said!) that to be able to make the deductions, one must be a full time real estate professional AND work on your investment properties 750 hours a year. Is that the correct interpretation of your paragraph above or does it mean work 750 hours in any aspect of real estate?
A Better Way to Grow | 3/03/07
Do you qualify as a full time real estate investor per the IRS?

Josh Dorkin posted on his blog that “full-time real-estate professionals, defined as someone who spends more than half of his working hours in real estate and more than 750 hours a year tending to real-estate activities, can fully deduct losses �…
Teresa Boardman | 4/03/07
hump! IRS
"Solution Drew" | 23/07/08
As long as I spend more time on my portfolio than my taxes I’m happy.

Thanks for the post.