How to qualify as an RE Pro?

[Melanie Baldridge]

To qualify as an RE Pro you must:

1. Spend more than half of your total working hours in an RE business in which you materially participate.

2. You must work at least 750 hours per year in a qualified RE business.

So most people who have high-earning W-2 jobs outside of real estate won't qualify.

But the unique thing about RE pro status is that even if you don’t qualify but your spouse does, you can both file jointly and claim the losses from your RE investments to offset your other active income together.

It's an incredibly powerful benefit if you do meet the criteria.

[William Whitley]

That's an important point for those seeking to have cost segregation studies performed for accelerated depreciation. I advise my clients to make sure to talk to their CPA before going to the expense of a cost seg, because they need to make sure the depreciation expense can benefit them.