Real estate professional

[Bobby Clifford]

Hello, I was curious if it would be beneficial for me to make efforts to qualify as a real estate professional for tax purposes. I am currently a stay at home dad but have the option to return to work at my previous profession anytime. ( which pays around 33k a year ) My spouse makes a considerable amount of money. (over 150k) I am curious if becoming a real estate agent would benefit us once we begin acquiring properties for rental purposes or would simply returning to my previous job be the better option once I'm done with the stay at home dad job. I know it will depend.. of course.. but if faced with the same choices which would tax professionals see as the better option. Thank you!!

[Brandon Hall]

@Christine Kankowski I believe he meant an RE pro for tax purposes.

@Bobby Clifford first off, the RE Pro status is only helpful if you have losses from rental activities that are becoming suspended due to one spouse earning significant income. 

Second, you do not need a license to be an RE Pro.

All you will need to do is to work 750 hours in real estate and greater than half your time needs to be in real estate. This qualifies you as a real estate professional. That's step one.

Step two is demonstrating that you materially participated in the rental activity. This is generally demonstrated by working 500 hours on your rentals.

Step one gives you the RE Pro designation. Step two unlocks your passive losses.

You don't need a license of any sort. This is not a LinkedIn qualification. It's just a tax election that is achieved by working a certain number of hours in real estate.