Hi all in the BP community! I was wondering for those of you who utilize the real estate professional status for tax purposes what are ways you qualify for the 750 hours besides property management. Curious to hear unique and creative ideas. My wife (former writer and editor) and I are planning to invest in the bay area and likely won't have enough property to manage to qualify purely on management alone. We both have our CA real estate licenses as of recent. An idea we have considered is copywriting for a real estate company for marketing purposes.
Has anyone used housing marketing/copywriting to fulfill some or all of the 750 hour requirements?
@Jay C. Unfortunately, marketing/copywriting for a a RE company is not considered to be an activity in line with a real property trade or business. It would be more in line of marketing. Another caveat to the the real estate professional rule is that more than 50% of your time worked is in real property trade or business. This means that if you have another job in say, marketing, that is greater than 750 hours a year, you will not be considered a RE professional.
@Dominick Austria Thanks for your response Dominick! My wife will be committing full time to real estate so that part satisfied. So if she created her own real estate company LLC would the marketing/copywriting count if facilitating buying and selling of real estate for us and others?
@Jay C. I don’t think this would qualify. Marketing solely for a real estate company won’t make it as facilitating real property. The IRS has held that mortgage brokers are not real estate professionals because they are in the financial business. However, they deal with real estate consumers. I think the same principle applies here.
@Dominick Austria Ah ok thanks for the info. How about real estate agent duties. Showing houses and buyer agent duties?
@Jay C. yes these are fine. You are bringing together buyers and sellers and negotiating contracts.
@Dominick Austria Thanks Dominick!!!!