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Updated almost 2 years ago on . Most recent reply

User Stats

11
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6
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Ale Rioja
  • Investor
  • Austin, TX
6
Votes |
11
Posts

Qualify as RE professional with full time W2 and single status

Ale Rioja
  • Investor
  • Austin, TX
Posted

Hi BP community, 

I wanted to see if it's possible for me to qualify as a RE professional or what other strategies are available. 

I know that to qualify as an RE professional for tax purposes, I must:

- spend 750+ hours a year doing RE

- "More than half of the personal services" I provide should be in RE

My situation:

- I have a full-time W2 that is not in the RE space. 

- I'm unmarried 

- I do spend more than 750 hours managing /analyzing my rentals, and 50%+ of my awake time is spent learning or working in RE. 

I read about strategies of having your spouse qualify as a RE professional, or going part-time with my W2. None of these are feasible for me. 

1) Is there a way for me to qualify as a RE professional? If not, what other strategies are available to reduce my active income? 

2) is there a max AGI (Adjusted Gross Income) at which this strategy (of using the RE professional status to reduce active income) is no longer worthwhile? I saw $150k but I'm unsure if it applies to RE professional losses. 

Thank you in advance! 

Most Popular Reply

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5,125
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Michael Plaks
#1 Tax, SDIRAs & Cost Segregation Contributor
  • Tax Accountant / Enrolled Agent
  • Houston, TX
6,006
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5,125
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Michael Plaks
#1 Tax, SDIRAs & Cost Segregation Contributor
  • Tax Accountant / Enrolled Agent
  • Houston, TX
Replied

@Ale Rioja

The short answer is - no.

The longer answer is that, if you have a normal 40-hr week, you need to show another 41 hours of every single week spent working in RE. Learning does not count, only actual work.

The solution? Marry a full-time Realtor. ;)

  • Michael Plaks
  • Loading replies...