24 Apr Are you getting all of your tax advantages?
I know many of you out there that got into real estate mainly because you heard of how great the tax advantages can be. Well, this can certainly be the case, but what I’ve learned is that your tax advantages are MUCH greater when can file as a ‘Real Estate Professional’.
Basically, the ‘Real Estate Professional’ status is a designation given by the IRS based on the number of hours that you work in real estate activities versus other activities. No, this doesn’t mean that you have to become a real estate sales agent or broker and you don’t need to drive around showing people homes, or putting out “for sale” signs or any of that other typical ‘realtor’ stuff.
All the Real Estate Professional designation means is that you spend a certain amount of time in real estate activities. It could mean that you spend time locating, renovating, leasing, or otherwise developing your own real estate portfolio, or yes, being an agent.
Anyways, the reason I’m sharing this post is because a recent court decision will make it easier for many to qualify as real estate professionals for purposes of the IRS passive loss rules. This will enable more of you landlords out there to fully deduct your losses from real estate rentals.