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Updated over 5 years ago on . Most recent reply
Real Estate professional & income loss
What is meant by “passive activity loss” for a real estate professional? I am currently 37% tax bracket and all passive activity losses are void for me (IRS form 8582).
However, it states that “unless the taxpayer is a real estate professional”, leading me to think one can capture RE losses/passive activity losses when they AGI is in excess of the current limits.
Anyone have experience and advice on this?
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#1 Tax, SDIRAs & Cost Segregation Contributor
- Tax Accountant / Enrolled Agent
- Houston, TX
Originally posted by @Joseph Martin:
@Basit Siddiqi thank you!
What I am thinking, is having my wife become a real estate professional and for taxes, MFJ and using the losses to offset other income
Does this make sense? Know if anyone does this?
Having your wife become anything other than what she wants can make her an ex-wife. ;)
That said, it is definitely possible and frequently done, but it is not easy. She needs to spend more than 15 hours/week (750 / yr) doing actual work on your real estate business. Reading BiggerPockets does not count as work. Dealing with tenants and contractors does.