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Updated about 4 hours ago on .

User Stats

37
Posts
13
Votes
Brady Ascheman
  • New to Real Estate
  • Benson, MN
13
Votes |
37
Posts

Real Estate Professional Status and SE tax

Brady Ascheman
  • New to Real Estate
  • Benson, MN
Posted

Hi everyone, when meeting with my CPA recently I was instructed by here that if you obtain "Real Estate Professional Status" as per the IRS rules then your rental income become "active" instead of "passive" income in the eyes of the IRS. She then stated that when it becomes active income it is subject to the 15.3% self-employment tax. I wanted to get some insight from others on if this is true since I can't find a good answer on the IRS website, and if it is true why does anyone want to gain real estate professional status?