Investor · San Diego, CA · Member since 2015 · 435 posts · 421 votes
I have wound up with about a dozen units that I now need to manage on my own. I am on SSDI for the past 6 years or so, due to serious illness, which is now temporarily quieter. I advertise for tenants, show units when I can, pick up materials and appliances (but don't load and unload) and meet inspectors, supervise repair workers, collect rents, keep records, pay bills, etc.
I'm absolutely spending enough hours/year to claim real estate professional status, and since I no longer work in my former profession due to disability, it's definitely more than half my working time.
The rental income has always been pass-through income. I never used a property manager, but my ex used to do most of the management. The rental income will continue to be pass-through.
I understand that there are tax advantages for claiming real estate professional status. But will it make me ineligible for SSDI?
I have wound up with about a dozen units that I now need to manage on my own. I am on SSDI for the past 6 years or so, due to serious illness, which is now temporarily quieter. I advertise for tenants, show units when I can, pick up materials and appliances (but don't load and unload) and meet inspectors, supervise repair workers, collect rents, keep records, pay bills, etc.
I'm absolutely spending enough hours/year to claim real estate professional status, and since I no longer work in my former profession due to disability, it's definitely more than half my working time.
The rental income has always been pass-through income. I never used a property manager, but my ex used to do most of the management. The rental income will continue to be pass-through.
I understand that there are tax advantages for claiming real estate professional status. But will it make me ineligible for SSDI?
I can’t speak to whether this will change your SSDI but I can tell you from the tax perspective you won’t have issues related to the SSDI.
@Karen F.- So I spent 10 years of my career helping people get on the SSDI / SSI programs, but it has been a couple years since I've done that.
It would definitely be safer not to claim the real estate professional status. If you have any W-2 or self-employment income, that pops up on Social Security's radar as possible "substantial gainful activity" that can get you disqualified. It doesn't sound like you have that income, but at some point Social Security may re-evaluate your disability. At that time, they may actually pull up your tax returns and get more detail as to the daily activities you're able to perform based upon the tax reporting. The definition of substantial gainful activity actually goes beyond just W-2 or self-employment income and considers your daily activities.
It has been as pass through income for many years, but my (now ex) husband was the one claiming real estate pro status - but the rental income was considered pass through, not as self-employed. I'm wondering if I can now claim real estate pro, keep the income pass through, and not endanger SSDI.