Tax Filing: Professional Real Estate Status

[Michael Doherty]

Hi All,

I am looking to get input from people who file their tax return using the Professional Real Estate Status. Specifically, I want to understand how you track your daily activity and to what level of detail? Are there any apps you use or do you handle it all on Excel? Showing the 750+ hours is not my challenge, but determining how to present it and to what detail is where I'm struggling. 

For example, can I simply say from 10-11 I sent emails or do I have to specify who I sent them to? From 11-12 I had 4 conversations with clients, do I need to specify details of those convos and what clients?

For context, I am a full time real estate agent and investor in Connecticut. I do wholesaling, flipping, and buy and hold rentals. Given I am claiming losses in excess of $25,000, it's important I have detailed logs of daily activity. 

Thank you in advance!

[Benjamin Weinhart]

Hi Michael,

As Jonathan said, I think you are thinking much more into this than what is required. You'll need to be able to substantiate your status if you're ever questioned about it, but it sounds like you're really good at record-keeping already, so that shouldn't be an issue. All you would need to say really is that you materially participated in the business during the tax year and just be prepared in the case of an audit/IRS notice.