Tax benefits? Real Estate Professional Designation?

[Ellen A.]

I now have 3 rental properties and 1 primary residence. 2 of the rental properties are doing great but the other 1 is turning into quite the money pit. We hope to spend a lot to fix it this year and maybe next year make money. Please let me know if there is anything I can do to get tax benefits for the losses. Someone mentioned I may need a Real Estate Professional Designation. Any help is appreciated!!

[Natalie Kolodij]

Do you work a full time job? 

If you do the odds are you can't qualify as RE Pro for tax benefits. 

You need to spend at least 700 hours annually on your rentals AND spend more time on rentals than any other activities (ie , jobs) 

Additionally, if this is requiring a lot of big renovations most of those will likely be capitalized (and depreciated over 27.5 years) and not deducted in 1 year any way. So the amount your spending on repairs mostly likely wont equate necessarily to a direct loss of equal amount. 

If your your other rentals are performing well enough to show income on taxes and not losses....then any loss generated from this project rental can reduce the taxable income created by the other two.