I've read some marvelous advice here about a variety of topics, so I'm going to ask this question that is puzzling me about the tax deductibility of my rental expenses.

I've been told that I can't deduct expenses due to my rental units (including depreciation etc.) UNLESS I am the property manager and have documented that I have spent more time managing, fixing, cleaning etc the property than all the other people COMBINED. For example, if I have an electrician, plumber and painter who work on my property and they each put in 100 hours per year for a total of 300 hours, I have to document that I've spent more than 300 hours in the year in order for me to qualify as the property manager in that tax year.

There is apparently a remote tiny exception in the IRS tax code that allows me to spend only 100 hours per year, again providing no one else spends more than that working on my property. The issue has to do with deductions on my taxes and if I don't have the maximum hours then I'm not considered the manager and can't deduct the expenses.

Can any of you explain to me if this is so or not and help me better understand the deductibility or non-deductibility of expenses? Oh, by the way, I own one property in my IRA, which has a PM (because the IRS requires a PM) and no, I realize those expenses can't be charged against my taxes, but I have another rental that is not in my IRA and I think I'm the manager of it, but am often reminded that I must do this 100 hour thing!!

The one rental not in my IRA is not in any kind of LLC, or S Corp or any legal category like that. I have recently established a new corporation because I want to be buying more rental real estate this year but so far it's just a lot of paperwork with no assets or anything in it.