Becoming a Real Estate Professional with W2 Income: Need Your Advice!!

[Japnik Singh]

Hello, Real Estate Enthusiasts!

I'm at an exciting juncture in my journey towards becoming a real estate professional. While I'm all in on this new career path, there are a few things I'm still trying to figure out. Particularly, I'm looking to offset deferred W2 income from a previous employer (I don't work any hours there currently) with real estate depreciation and operational losses.

So here are the questions I'm grappling with, and I'd truly appreciate your expert opinions:

Questions:

1. W2 Income and RE Professional Status:
   • Can you qualify as a real estate professional while still receiving deferred W2 income from a previous job?
2. The 750-Hour Requirement: Strategies and Tips:
   • How do you recommend accumulating the required 750 hours of real estate activities?
   • Do tasks like preparing for a real estate license, commuting, and researching properties count toward this time?
   • Does research time that ultimately leads to a property purchase count?
   • What about time spent managing tenants, say on Airbnb?
3. Active Losses and Income Types:
   • How do active losses from real estate investment typically offset other types of income? Do they tackle W2 income first, or passive income like dividends?
4. Year-End Property Purchase and Depreciation:
   • If I buy a property on December 31, can I still claim depreciation for that year?

I'm committed to working full-time as a real estate professional and will have my first property soon. I want to ensure I'm following all guidelines and not missing anything crucial.

Your insights will be invaluable to me, so please drop your thoughts and advice in the comments below!

Thank you for your time and expertise!