I’m a professional full time home inspector with rental income properties. Haven’t been able to find definitive answers on if I would qualify for real estate professional tax status under my profession. I know this is a detailed question for my tax attorney but hoping for some guidance prior to consultation. I know developers, appraisers and other non-realtor professionals have qualified, but in all my digging have not seen an example of home inspector. Any thoughts or advice is appreciated thanks!
To be a real estate professional, an individual must spend the majority of his or
her time in real property businesses:
• Development or redevelopment
• Construction or reconstruction
• Acquisition or conversion
• Management or operation
The taxpayer must meet each of the following two time requirements:
• More than 50 percent of his/her time working in real property businesses;
• More than 750 hours of service during the year.
I assume you're asking whether hours working as a self-employed inspector would count as hours spent in real estate trades or businesses.
I'm not aware of a specific court case dealing with an inspector, but based on my interpretation of the statute and court cases, the answer is "probably yes."
in order to claim REPS your primary job has to be real estate. I do not think home inspection will count. high risk of being audited.
I agree that it might have a high chance of being questionable if audited.
I can also see the argument being made that if 'construction and reconstruction' are eligible, is Inspection not a normal part of that? Being a full time contractor myself, I could see posing the question of "What constitutes 'construction'? Just the carpenter/general? What about all of the other Trades like plumbing, electrical, siding, HVAC, flooring, inspections"?
Thanks for the replies, I appreciate the guidance! Sounds like a potential long shot but will certainly keep digging!