Real Estate Professional

4 Replies

Does anyone know if these rules are still applicable today? My understanding was that in any given situation, you could not work full-time in order to qualify as a Real Estate Professional. For instance, if someone works 30 hours per week at a salary position, could then work 31 hours per week and claim this? Also, does anyone know if it has to be on your OWN properties or if you're assisting, earning income from others?

https://www.biggerpockets.com/renewsblog/2014/09/2...

Thanks in advance! 

The rule is you must spend at least 750 hours on real estate activities OR more hours on RE than on anything else.  So, if you have a 30 hour a week job (1560 hours a year) and you can document at least 1561 hours a year on RE activities, you're good.  Doesn't have to be your own properties.  

Consult with a CPA on your specific situation. The rules are very complex to qualify for the Real Estate Professional status. FYI - the courts have in the past ruled a Dentist as a RE Professional and a salaried Financial Advisor also was able to qualify in a Tax Court Case. It is also very fact specific but it is possible.

Originally posted by @Megan McCrea :

Does anyone know if these rules are still applicable today? My understanding was that in any given situation, you could not work full-time in order to qualify as a Real Estate Professional. For instance, if someone works 30 hours per week at a salary position, could then work 31 hours per week and claim this? Also, does anyone know if it has to be on your OWN properties or if you're assisting, earning income from others?

https://www.biggerpockets.com/renewsblog/2014/09/2...

Thanks in advance! 

 Megan, in addition to the great info already shared,  

The real property trades or businesses in which a taxpayer must materially participate to qualify as a real estate professional don't necessarily involve rental realestate. In addition to the renting and leasing of realty, real property trades or businesses include enterprises such as construction, development, buying, operating, and managing realty, as well as realty brokerage businesses.

Originally posted by @Jon Holdman :

The rule is you must spend at least 750 hours on real estate activities OR more hours on RE than on anything else.  So, if you have a 30 hour a week job (1560 hours a year) and you can document at least 1561 hours a year on RE activities, you're good.  Doesn't have to be your own properties.  

It's actually AND, not OR. Both tests must be met, and there're more rules, as @Lance Lvovsky said. 

@Megan

Yes, generally a full-time job precludes RE Pro, but in rare cases it might work - so discuss with a competent accountant whether you can qualify.

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