Strategy for offseting passive rental losses for my active flips?

[Hubert Chen]

I am a full-time flipper. My wife and I just started acquiring rental properties and I want to offset the passive rental loses against my active flip income. I thought I just had to have 750 hours in my real estate profession to take advantage of the real estate professional status to offset my active income. I was informed that it is 750 hours per property, so the REP strategy is not going to work. So, my idea is to structure my flips by having my wife own 99% as limited partner in my flips and have her take 99% of the profits. Our passive rental losses can then be fully used. Will this work? Am I missing anything?

[Ashish Acharya]

Quote from @Hubert Chen:

I am a full-time flipper. My wife and I just started acquiring rental properties and I want to offset the passive rental loses against my active flip income. I thought I just had to have 750 hours in my real estate profession to take advantage of the real estate professional status to offset my active income. I was informed that it is 750 hours per property, so the REP strategy is not going to work. So, my idea is to structure my flips by having my wife own 99% as limited partner in my flips and have her take 99% of the profits. Our passive rental losses can then be fully used. Will this work? Am I missing anything?

If you are a full-time flipper, you can easily do this. All you have to do this materially participate in your rental properties. There are 7 tests to meet the MP test. One of the tests doesn't even have an hour threshold if you manage your property yourself (or your spouse does).