Real estate professional status 750 hours doable?
Member since 2022 · 20 posts · 12 votes
Real estate professional status 750 hours doable?
Most Popular Reply
Michael PlaksPro Member
Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votesEven though I already gave you an answer earlier on this thread, I need to add a few comments after seeing some totally irresponsible and reckless advice given by other commenters.
Short story is:
A. Can your wife qualify for REPS in theory? Certainly, this is a common strategy.
B. Can she qualify in your specific situation? No. Not unless she adds more real estate work.
C. Can you try something else besides qualifying your wife for REPS? Maybe. STRs for example.
You were told...
"she can... but careful planning and documentation are essential"
"...making sure that your wife understands what she needs to do to document her hours and activities."
Huh? Documenting WHAT?!? C'mon now, let's be real. You cannot document something that does not exist. Drop that empty hype, fellows. Yes, I said that, I call things what they are, I'm that old grumpy dude.
We need 750 hours. Where do we get it from?
From repairs and maintenance? Fine. How long does it take you to manage a maintenance request from your tenant? 1-2 hours per incident. Oh, I see, you are not going to hire a plumber. You are going to send your wife to personally unclog that toilet. Well, enjoy the couch tonight. But also, how long does it take in this case? OK, I will give you 5 hours. But we need 750 hours per year - or 15 hours per week. So we need 3 maintenance incidents per week, personally handled by your wife. Every single week, 3 incidents. Sorry, I'm not buying this story.
From make-ready's. Sure. How long does that take? So your wife will spend 5 full days repainting the whole place and scrubbing the bathtubs. Ok, we got 40-50 hours, tops. You had 3 of your 9 properties changing tenants. Yay, we have 150 hours!!! Still need another 600 hours. Which is 2 (instead of 3) 5-hour maintenance gigs every damn week.
From tenant changes. Gotcha. How many applicants did you interview? How long did it take you to negotiate the lease and oversee the move-in?
From visiting properties? You visit occupied properties? For what? How often? For how long? No, it's not a normal business practice and does not pass the smell test.
From driving? Travel time has been treated unfavorably by courts, with a few exceptions. If you rely on travel time to meet 750 hours, you're playing Russian roulette with the IRS. And even then - travel where, how often and, most importantly - why?
From watching YouTube gurus and listening to BiggerPockets podcasts? Nice try, but this time does not count.
In order to meet 750 hours, your wife will need one of the below:
- do something else real estate related, like wholesaling or realtor
- actively work on expanding your rental portfolio
- have an extensive DIY rehab, like a month-long full-time rehab (and then she might need another kind of rehab)
- a calamity such as multiple properties damaged in a storm where she will have to deal with insurers and contractors
- something else out of the ordinary
Again - if all you have is 9 single-family properties with stable tenants and typical occasional maintenance - you don't have enough work to collect 750 hours. Need something else besides lightly managing these 9 doors.
28 Replies
- 1yTim DelaneyPro MemberBuffalo, NY · Member since 2018 · 790 posts · 530 votes
Does she handle all the tenant communication? Hiring lawn care? Maintenance scheduling (I realize it may not be frequent)?
To get those hours, maybe turn one or two into medium term rentals (you want the average stays to be over 7 days so they don't fall into STR status) which would give her more to do, particularly in the first year of furnishing them and getting everything set up.
Alternatively, she maybe she could manage the properties but also get her RE license and try to sell a house or two a year - go to lots of open houses or run them for other agents?
Just ideas, talk to your CPA to make sure you are doing it properly.
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Tim Delaney:
Does she handle all the tenant communication? Hiring lawn care? Maintenance scheduling (I realize it may not be frequent)?
To get those hours, maybe turn one or two into medium term rentals (you want the average stays to be over 7 days so they don't fall into STR status) which would give her more to do, particularly in the first year of furnishing them and getting everything set up.
Alternatively, she maybe she could manage the properties but also get her RE license and try to sell a house or two a year - go to lots of open houses or run them for other agents?
Just ideas, talk to your CPA to make sure you are doing it properly.
Yeah the plan is for her to do everything for the rentals, collecting rent, posting houeses for rent in Zillow, evicting tenants, tenant application, etc but I don't know if these would be enough for her to have spent 750 hours a year... Thanks fo your reply.
- 1yTim DelaneyPro MemberBuffalo, NY · Member since 2018 · 790 posts · 530 votes
Quote from @Samuel Kim:
Quote from @Tim Delaney:
Does she handle all the tenant communication? Hiring lawn care? Maintenance scheduling (I realize it may not be frequent)?
To get those hours, maybe turn one or two into medium term rentals (you want the average stays to be over 7 days so they don't fall into STR status) which would give her more to do, particularly in the first year of furnishing them and getting everything set up.
Alternatively, she maybe she could manage the properties but also get her RE license and try to sell a house or two a year - go to lots of open houses or run them for other agents?
Just ideas, talk to your CPA to make sure you are doing it properly.
Yeah the plan is for her to do everything for the rentals, collecting rent, posting houeses for rent in Zillow, evicting tenants, tenant application, etc but I don't know if these would be enough for her to have spent 750 hours a year... Thanks fo your reply.
Just tell her to be the most inefficient, slowest worker possible 🤣.
Not sure how far the houses are, but could she do drivebys of each one every week as well?
I'm not sure if you are planning to buy more, but I think if she becomes an agent then her time looking for properties would also count. Definitely double check that though.
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Tim Delaney:
Quote from @Samuel Kim:
Quote from @Tim Delaney:
Does she handle all the tenant communication? Hiring lawn care? Maintenance scheduling (I realize it may not be frequent)?
To get those hours, maybe turn one or two into medium term rentals (you want the average stays to be over 7 days so they don't fall into STR status) which would give her more to do, particularly in the first year of furnishing them and getting everything set up.
Alternatively, she maybe she could manage the properties but also get her RE license and try to sell a house or two a year - go to lots of open houses or run them for other agents?
Just ideas, talk to your CPA to make sure you are doing it properly.
Yeah the plan is for her to do everything for the rentals, collecting rent, posting houeses for rent in Zillow, evicting tenants, tenant application, etc but I don't know if these would be enough for her to have spent 750 hours a year... Thanks fo your reply.
Just tell her to be the most inefficient, slowest worker possible 🤣.
Not sure how far the houses are, but could she do drivebys of each one every week as well?
I'm not sure if you are planning to buy more, but I think if she becomes an agent then her time looking for properties would also count. Definitely double check that though.
Yes thats a good idea, thank you. She might want to get a real estate agent license
- 1yMichael PlaksPro MemberTax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votesWe're talking about 15 hours of hands-on work every single week of the year. Suggestions like driving by the houses weekly are silly, such trips serve no legitimate business purpose.
Quote from @Samuel Kim:
Hello i am a doctor who wants to use cost segregation/bonus depreciation on my 9 rental houses, my home maker wife wants to meet the 750hr test to obtain real estate professional status and material participation.
Is it possible for her to have that many hours (750h) by managing our 9 properties? all are new constructions and I don't know how she is gonna be able to find 750h of work to do in these new construction houses.
If these houses have stable long-term tenants, I share your concern. It's next to impossible to accumulate this many hours. Unless you have unusual circumstances such as a month of DIY repairs on one of the houses, your wife would need to find more real estate work for herself.
And DIY repairs are not recommended for other reasons: it will take you much longer to complete, depriving you of rental income, and you run a high risk of your wife becoming your ex-wife.
Same risk exists if you push your wife into becoming a Realtor or some other real estate activity just for the sake of tax benefits. Also, the tax benefits you expect might be over-hyped: https://www.biggerpockets.com/forums/51/topics/1075919-five-...
Figuring our whether there is a useful tax strategy in your situation would take a one-on-one consultation with an experienced tax strategist, and here is how to find one:
https://www.biggerpockets.com/forums/51/topics/1222774-expla... - Real Estate Agent · Salt Lake City, UT · Member since 2020 · 490 posts · 205 votes1y
Quote from @Samuel Kim:
Hello i am a doctor who wants to use cost segregation/bonus depreciation on my 9 rental houses, my home maker wife wants to meet the 750hr test to obtain real estate professional status and material participation.
Is it possible for her to have that many hours (750h) by managing our 9 properties? all are new constructions and I don't know how she is gonna be able to find 750h of work to do in these new construction houses.
Any help appreciated
I agree with others that having her become licensed would go a long way. It is a good question for your CPA. It should help if she doesn't have any other w2s or anything similar. Shows she is focused on RE
- 1ySean O'KeefePro MemberCPA | Accepting new clients | 50 States · Member since 2022 · 1k+ posts · 870 votes
Quote from @Samuel Kim:
Hello i am a doctor who wants to use cost segregation/bonus depreciation on my 9 rental houses, my home maker wife wants to meet the 750hr test to obtain real estate professional status and material participation.
Is it possible for her to have that many hours (750h) by managing our 9 properties? all are new constructions and I don't know how she is gonna be able to find 750h of work to do in these new construction houses.
Any help appreciated
Good questions, first the IRS requirements to meet Real Estate Professional Status (REPS) are:
- > 50 percent of his/her time working in real property businesses; AND,
- 750 hours of service during the year AND
- At least %5 owner
If married filing jointly, one spouse must meet 750 hour requirement on their own.
In addition, you still need to meet the IRS requirements for material participation in each property or elect to group them
Based on what you say it sounds like it would be challenging for you and your wife to meet these requirements unless she gets involved in more real estate activities that qualify for REPS hours.
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*This post does not create a CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice. - 1yAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I would consider looking at short term rentals for possible investments. There can also be substantial tax benefits if structured properly.
As always, make sure the investment is a good investment for you.
Brick House CPAs53 Reviews - 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
@Samuel Kim Your wife can meet the 750-hour test for Real Estate Professional Status (REPS) by actively managing your 9 rental properties, but careful planning and documentation are essential, especially with low-maintenance new construction. Activities like tenant management, marketing, bookkeeping, inspections, overseeing contractors, and compliance tasks all count.
Avoid outsourcing tasks, as this reduces eligible hours, and consider adding properties if meeting the threshold is challenging. If she qualifies and materially participates, passive loss limitations won’t apply, allowing you to offset your income with cost segregation and bonus depreciation.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
INVESTOR FRIENDLY CPA®5241 Reviews - Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes1y
Short answer is "yes." I have worked with many medical professionals where they adopted the basic strategy you are trying to use. Really the main challenge is going to be making sure that your wife understands what she needs to do to document her hours and activities. As others said, becoming a licensed realtor is helpful as when it comes to filling up the hours.
Just note that you guys may end up in what I call the "1031 exchange until you both die" cycle. It's a way many medical professional + spouse combo have saved a lot of money on taxes. But it is a serious commitment.
But do talk to a CPA/tax professional who has done this. There will likely be some hand holding in the beginning. Also assuming your practice is going well, consider talking to asset protection attorneys. Depending on your practice size and income level, you may just want to start with maxing out 401k and also adopting a defined benefit plan before committing to becoming a lifelong real estate investor.
Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
- 1yMichael PlaksPro MemberTax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
Even though I already gave you an answer earlier on this thread, I need to add a few comments after seeing some totally irresponsible and reckless advice given by other commenters.
Short story is:
A. Can your wife qualify for REPS in theory? Certainly, this is a common strategy.
B. Can she qualify in your specific situation? No. Not unless she adds more real estate work.
C. Can you try something else besides qualifying your wife for REPS? Maybe. STRs for example.You were told...
"she can... but careful planning and documentation are essential"
"...making sure that your wife understands what she needs to do to document her hours and activities."
Huh? Documenting WHAT?!? C'mon now, let's be real. You cannot document something that does not exist. Drop that empty hype, fellows. Yes, I said that, I call things what they are, I'm that old grumpy dude.
We need 750 hours. Where do we get it from?
From repairs and maintenance? Fine. How long does it take you to manage a maintenance request from your tenant? 1-2 hours per incident. Oh, I see, you are not going to hire a plumber. You are going to send your wife to personally unclog that toilet. Well, enjoy the couch tonight. But also, how long does it take in this case? OK, I will give you 5 hours. But we need 750 hours per year - or 15 hours per week. So we need 3 maintenance incidents per week, personally handled by your wife. Every single week, 3 incidents. Sorry, I'm not buying this story.From make-ready's. Sure. How long does that take? So your wife will spend 5 full days repainting the whole place and scrubbing the bathtubs. Ok, we got 40-50 hours, tops. You had 3 of your 9 properties changing tenants. Yay, we have 150 hours!!! Still need another 600 hours. Which is 2 (instead of 3) 5-hour maintenance gigs every damn week.
From tenant changes. Gotcha. How many applicants did you interview? How long did it take you to negotiate the lease and oversee the move-in?
From visiting properties? You visit occupied properties? For what? How often? For how long? No, it's not a normal business practice and does not pass the smell test.
From driving? Travel time has been treated unfavorably by courts, with a few exceptions. If you rely on travel time to meet 750 hours, you're playing Russian roulette with the IRS. And even then - travel where, how often and, most importantly - why?
From watching YouTube gurus and listening to BiggerPockets podcasts? Nice try, but this time does not count.
In order to meet 750 hours, your wife will need one of the below:
- do something else real estate related, like wholesaling or realtor
- actively work on expanding your rental portfolio
- have an extensive DIY rehab, like a month-long full-time rehab (and then she might need another kind of rehab)
- a calamity such as multiple properties damaged in a storm where she will have to deal with insurers and contractors
- something else out of the ordinaryAgain - if all you have is 9 single-family properties with stable tenants and typical occasional maintenance - you don't have enough work to collect 750 hours. Need something else besides lightly managing these 9 doors.
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Michael Plaks:
Even though I already gave you an answer earlier on this thread, I need to add a few comments after seeing some totally irresponsible and reckless advice given by other commenters.
Short story is:
A. Can your wife qualify for REPS in theory? Certainly, this is a common strategy.
B. Can she qualify in your specific situation? No. Not unless she adds more real estate work.
C. Can you try something else besides qualifying your wife for REPS? Maybe. STRs for example.You were told...
"she can... but careful planning and documentation are essential"
"...making sure that your wife understands what she needs to do to document her hours and activities."
Huh? Documenting WHAT?!? C'mon now, let's be real. You cannot document something that does not exist. Drop that empty hype, fellows. Yes, I said that, I call things what they are, I'm that old grumpy dude.
We need 750 hours. Where do we get it from?
From repairs and maintenance? Fine. How long does it take you to manage a maintenance request from your tenant? 1-2 hours per incident. Oh, I see, you are not going to hire a plumber. You are going to send your wife to personally unclog that toilet. Well, enjoy the couch tonight. But also, how long does it take in this case? OK, I will give you 5 hours. But we need 750 hours per year - or 15 hours per week. So we need 3 maintenance incidents per week, personally handled by your wife. Every single week, 3 incidents. Sorry, I'm not buying this story.From make-ready's. Sure. How long does that take? So your wife will spend 5 full days repainting the whole place and scrubbing the bathtubs. Ok, we got 40-50 hours, tops. You had 3 of your 9 properties changing tenants. Yay, we have 150 hours!!! Still need another 600 hours. Which is 2 (instead of 3) 5-hour maintenance gigs every damn week.
From tenant changes. Gotcha. How many applicants did you interview? How long did it take you to negotiate the lease and oversee the move-in?
From visiting properties? You visit occupied properties? For what? How often? For how long? No, it's not a normal business practice and does not pass the smell test.
From driving? Travel time has been treated unfavorably by courts, with a few exceptions. If you rely on travel time to meet 750 hours, you're playing Russian roulette with the IRS. And even then - travel where, how often and, most importantly - why?
From watching YouTube gurus and listening to BiggerPockets podcasts? Nice try, but this time does not count.
In order to meet 750 hours, your wife will need one of the below:
- do something else real estate related, like wholesaling or realtor
- actively work on expanding your rental portfolio
- have an extensive DIY rehab, like a month-long full-time rehab (and then she might need another kind of rehab)
- a calamity such as multiple properties damaged in a storm where she will have to deal with insurers and contractors
- something else out of the ordinaryAgain - if all you have is 9 single-family properties with stable tenants and typical occasional maintenance - you don't have enough work to collect 750 hours. Need something else besides lightly managing these 9 doors.
Mr Michael I can't thank you enough for your staight forward hones and very informative recommendations.
Again thank you sir, i think my wife won't be able to find 750 hrs a year in our circumstances.
Thank you for your knowledge and honesty.
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Ashish Acharya:
@Samuel Kim Your wife can meet the 750-hour test for Real Estate Professional Status (REPS) by actively managing your 9 rental properties, but careful planning and documentation are essential, especially with low-maintenance new construction. Activities like tenant management, marketing, bookkeeping, inspections, overseeing contractors, and compliance tasks all count.
Avoid outsourcing tasks, as this reduces eligible hours, and consider adding properties if meeting the threshold is challenging. If she qualifies and materially participates, passive loss limitations won’t apply, allowing you to offset your income with cost segregation and bonus depreciation.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.Well I guess its not true what you are telling me, we paid you thousands to help us meet the tests for REP for my wife and you did not deliver.
- Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes1y
I’m not sure if you’re just trying to be controversial, but it’s clear everyone agrees this requires careful planning with a qualified professional. I don' think anyone is suggesting that simply managing these 9 properties is enough. However, having a high-income earner with a spouse willing to qualify as a real estate professional is a well-documented strategy to save significantly on income taxes. Instead, you’re attacking a strawman and questioning the knowledge/character of others.
@Samuel Kim: As I mentioned in my first post, speak with a qualified professional. I say this to folks all the time on BP, but no lawyer/CPA can give you meaningful advice on a public forum like BP. No one here is going to ask you to publicly share your income as a physician or dive into all the specifics required to give meaningful guidance. What I can say is that many physician + spouse combos have successfully done this and survived audits.
Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
- 1yMichael PlaksPro MemberTax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
Quote from @Chris K.:
I’m not sure if you’re just trying to be controversial,
As an attorney, you are trained to read the entire text. Mine said:
Short story is:
A. Can your wife qualify for REPS in theory? Certainly, this is a common strategy.
B. Can she qualify in your specific situation? No. Not unless she adds more real estate work.
So we are actually in agreement. Except you insist on giving the OP a "yes" based on the generic strategy (A) while I insist on giving him a "no" based on his specific situation (B).To answer your question to me - no, I'm not trying to be controversial. I'm trying to be specific and helpful for the question posed by OP, for his particular situation.
- Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes1y
But you don’t know his situation. He asked if it’s "possible." Reasonable experts could say "yes" or "no" based on what he shared. From what I’ve seen, no one said, "Go ahead, bro. You’re totally fine." Everyone has said, "go talk to a professional," because that’s the only real advice any professional on BP can give.
My issue with your specific post is that it sets up a strawman and takes a personal shot at other posters. To be clear, I think you’re a great poster, and you share good advice. But you don’t know much about the original poster—just like everyone else here. That’s why you told him to talk to a professional. The same goes for me and other folks who lean towards "yes."
Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
- 1yMichael PlaksPro MemberTax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
Quote from @Chris K.:
But you don’t know his situation. He asked if it’s "possible."
I do not know his entire situation, this is true. But neither do you, yet you started with:
"Short answer is "yes" - which I consider misleading.And you manipulated the OP's question to fit your agenda. He did not ask:
"Is it possible..."
In which case your reply would have been appropriate.He actually asked more specifically:
"Is it possible for her to have that many hours (750h) by managing our 9 properties?"
Which makes my answer, as opposed to yours, applicable.
Especially since I qualified mine by adding "...unless she adds more real estate work"
Your argument reminds my of an old joke:
- Doctor, will I be able to play violin after this surgery?
- Most certainly!
- This is great news, because I have never played violin before.
And speaking of arguing, we are actually in agreement on the validity of REPS strategy, and I have many clients doing this. We are also in agreement on implementation, such as the need to document hours. And of course we're in agreement on consulting a tax pro.
We only disagree on what is basically a customer service issue. You want to give a generic answer (as in, yes, you can get pregnant) while I want to customize my answer to the person asking (as in, no, you cannot get pregnant because you're a man). And then you argue with me saying that I don't know all the details (as in, well, these days even a man can get pregnant.) - Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes1y
Sorry if I wasn’t clear. My issue isn’t with the substance of your comments—it’s with your behavior. You accused other licensed professionals of giving "totally irresponsible and reckless advice" in a public forum. I don’t know what license you hold, but if I make a claim like that in a public forum against other lawyers, at minimum I am facing an ethics complaint. You can’t make an accusation like that and then walk it back by calling it a disagreement over a "customer service issue." That’s ridiculous.
And what has been accomplished? Based on his last post, @Samuel Kim now seems to think it’s pointless for him and his wife to explore this topic over posts made by professionals who barely know anything about his situation. The fact that he’s walking away from this thinking it’s a dead end is more irresponsible and reckless than anything anyone else has said.
The only correct advice is, "Go talk to a professional."
Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
- 1yMichael PlaksPro MemberTax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
@Samuel Kim - please contact @Chris K. privately and allow him to show you how you can benefit from this wonderful strategy that he implemented for his many health professional clients. I profusely apologize for leading you astray with my irresponsible and reckless advice, as per Mr. K.'s comment.
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Chris K.:
Sorry if I wasn’t clear. My issue isn’t with the substance of your comments—it’s with your behavior. You accused other licensed professionals of giving "totally irresponsible and reckless advice" in a public forum. I don’t know what license you hold, but if I make a claim like that in a public forum against other lawyers, at minimum I am facing an ethics complaint. You can’t make an accusation like that and then walk it back by calling it a disagreement over a "customer service issue." That’s ridiculous.
And what has been accomplished? Based on his last post, @Samuel Kim now seems to think it’s pointless for him and his wife to explore this topic over posts made by professionals who barely know anything about his situation. The fact that he’s walking away from this thinking it’s a dead end is more irresponsible and reckless than anything anyone else has said.
The only correct advice is, "Go talk to a professional."
Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
Chris can you share how have those couples been able to achieve the 750hr requirement? My wife is not a real estate agent, does not do anything real estate related other than wanting to manage our 9 rental houses, how can she meet the 750 hrs with just managing 9 new construction houses? Please explain, thank you!
- Accountant · Accepting new clients from anywhere in the USA · Member since 2025 · 37 posts · 19 votes1y
I think it will be very difficult to show 750 hours, most tenants deposit the rent, so there is no rent collection. unless you have a very high turnover of tenants, where you need to show the houses again and again, I am not sure where you can "find" all those hours for her, especially that you say the properties are newer, so how much repairs would you have? and frankly most landlords send a technician to fix things, not go there themselves, same goes for lawn care, usually you have a company that comes every week/other week, you do not need to be there....
I also am not sure her getting her real estate license and sell a property a year as someone suggested will qualify for the 750 hours.
I know we all want to make money, but we do not want to raise red flags....
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Havital Miltz:
I think it will be very difficult to show 750 hours, most tenants deposit the rent, so there is no rent collection. unless you have a very high turnover of tenants, where you need to show the houses again and again, I am not sure where you can "find" all those hours for her, especially that you say the properties are newer, so how much repairs would you have? and frankly most landlords send a technician to fix things, not go there themselves, same goes for lawn care, usually you have a company that comes every week/other week, you do not need to be there....
I also am not sure her getting her real estate license and sell a property a year as someone suggested will qualify for the 750 hours.
I know we all want to make money, but we do not want to raise red flags....
Thank for your honest opinion.
- 1yCorby GoadeBusiness MemberInvestor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
Quote from @Samuel Kim:
Hello i am a doctor who wants to use cost segregation/bonus depreciation on my 9 rental houses, my home maker wife wants to meet the 750hr test to obtain real estate professional status and material participation.
Is it possible for her to have that many hours (750h) by managing our 9 properties? all are new constructions and I don't know how she is gonna be able to find 750h of work to do in these new construction houses.
Any help appreciated
I would definitely be talking to a real estate savvy CPA- there are lots of armchair tax experts on BP and you can get really confident and incorrect advice.
Have you considered just having one be an STR and using the loophole?
- Member since 2022 · 20 posts · 12 votes1y
Quote from @Corby Goade:
Quote from @Samuel Kim:
Hello i am a doctor who wants to use cost segregation/bonus depreciation on my 9 rental houses, my home maker wife wants to meet the 750hr test to obtain real estate professional status and material participation.
Is it possible for her to have that many hours (750h) by managing our 9 properties? all are new constructions and I don't know how she is gonna be able to find 750h of work to do in these new construction houses.
Any help appreciated
I would definitely be talking to a real estate savvy CPA- there are lots of armchair tax experts on BP and you can get really confident and incorrect advice.
Have you considered just having one be an STR and using the loophole?
Yes I have but i am concerned that STR market is very unprofitable unless you know what you are doing.
- 1yCorby GoadeBusiness MemberInvestor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
If you have high W2 income, the amount your STR makes (or loses) will be peanuts compared to the tax savings. Way better returns on the cost seg than you'd ever cash flow from an LTR.
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