Real Estate Professional - timing of events during the year?

[Cooper Marcus]

Last year I owned no rental property and spent little time on real estate. This year I will acquire at least one rental property and meet the qualifications for both Real Estate Professional and Material Participation so that I can deduct my rental real estate losses against my wife's earned income. 

Does the "order of operations" within the year matter? 

For example, I won't be able to accrue the 750+ hours until the end of the year - does it matter if I acquire the rental property earlier in the year, prior to reaching the 750+ hour total? 

Do I have to accrue the 750+ hours after I acquire my first rental property, or can I count hours spent researching and negotiating the acquisition? 

[Natalie Kolodij]

Originally posted by @Cooper Marcus:

Last year I owned no rental property and spent little time on real estate. This year I will acquire at least one rental property and meet the qualifications for both Real Estate Professional and Material Participation so that I can deduct my rental real estate losses against my wife's earned income. 

Does the "order of operations" within the year matter? 

For example, I won't be able to accrue the 750+ hours until the end of the year - does it matter if I acquire the rental property earlier in the year, prior to reaching the 750+ hour total? 

Do I have to accrue the 750+ hours after I acquire my first rental property, or can I count hours spent researching and negotiating the acquisition? 

 The odds of qualifying with 1 rental property seem veryyyyyyyyyy slim. 

You need to spend more time on real estate than ANY OTHER combined activities. 

This means if you have a full time job- you likely don't qualify. This is the rule that holds most people up, and the one the tax court throws these cases out on regularly. 

If you don't have a full time though the timing of when you acquire the hours doesn't matter. 

You do need to have a constant, ongoing log of your time that qualifies. 

And keep in mind that time used to analyze new deals/acquisitions does not count toward qualifying hours.