Is there an IRS Form for aggregrating RE Professional activities?

[Cheryl C.]

Is there a specific IRS Form or place on a form where you elect to "aggregate" RE Professional activities? I have about 20 properties and want them aggregated as one activity for the purpose of meeting RE Professional requirements. Does anyone know how this election is recorded somewhere?

[Jeff S.]

Are you sure you want to do this, Cheryl? With 20 properties, I suspect you’ve been suspending passive losses. The two edged sword here is that if you aggregate your properties, and presumably qualify, you’ll be able to deduct passive losses in excess of $25k with income over 150k.

The bad news is that you will not be able to deduct any previously qualified (i.e. suspended) losses until you sell the last aggregated property. The time period is extended as you continue to buy and sell properties in this group, until you sell the last one. If you’re doing this long term, you might never be able to take the suspended losses. This also means you should list the specific properties.

To see and prepare for the joys you might be in for, here’s the Passive Activity Loss Audit Technique Guide direct from the IRS.

Jeff