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ForumsArrowTax, Legal Issues, Contracts, Self-Directed IRAArrowREP Tax Status as Home Inspector
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REP Tax Status as Home Inspector

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  • Posts 11
  • Votes 13

Gregory Hill
Rental Property Investor from Kalamazoo, MI

posted about 1 month ago

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!

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Check Rosette Top Subjects:
Team, Analyze Deals, and Taxes & Accounting
  • Posts 5.2K
  • Votes 2.2K

Steven Hamilton II
Accountant, Enrolled Agent from Grayslake, IL

replied about 1 month ago

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

• Rental

• Management or operation

• Leasing

• Brokerage

The taxpayer must meet each of the following two time requirements:

• More than 50 percent of his/her time working in real property businesses;

AND,

• More than 750 hours of service during the year. 

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Check Rosette Top Subjects:
Tenants, Managing Tenants, and Rentals
  • Posts 3.3K
  • Votes 3.2K

Michael Plaks
Tax Accountant / Enrolled Agent from Houston, TX

replied about 1 month ago

@Gregory Hill

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."

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  • Posts 112
  • Votes 44

Victoria S.
from Overland park, Kansas

replied about 1 month ago

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.

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Check Rosette Top Subjects:
Rentals, Analyze Deals, and Single Family
  • Posts 1.3K
  • Votes 769

Daniel Dietz
Rental Property Investor from Reedsburg, WI

replied about 1 month ago
Interesting discussion. I have never heard this particular job being brought up in regards to REP status. 

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"?

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  • Posts 11
  • Votes 13

Gregory Hill
Rental Property Investor from Kalamazoo, MI

replied 30 days ago

Thanks for the replies, I appreciate the guidance! Sounds like a potential long shot but will certainly keep digging! 

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