Material Participation for Real Estate Professionals

[Bruce D. Kowal]

1]  Lots of questions about how to qualify as a Real Estate Professional.  The absolute best resource for this are the IRS Audit Techniques Guide for Passive Activities.  In particular Chapters 2 and 4.  This is written for IRS auditors, who are not rocket scientists.  You will be able to spot problems well in advance.  

Here is the link:  Passive Activity Loss - Audit Technique Guide

2]  Also, for those of you who have extended the due date of your individual tax returns, the deadline is October 15, and if you want to elect to group your passive activities, don't miss the deadline.

And if you have extended your entities, Corps and LLC etc., the deadline is one week from Thursday.

Tip:  always file something.  You have three years to amend.  

3]  Consult a CPA with some experience in these matters.  And if he screws up, remember, you can always amend.