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Updated over 4 years ago,
Spouse or Myself as Real Estate Pro Status
I'm sure there's another one of these threads out there, so feel free to redirect me.
I'm a full-time mortgage lender (not broker - we lend our own money). My wife works just a couple hours a week as a fitness instructor. We are both very active in our rentals (acquiring, managing, renovations, etc) and in the flips we've done, though we do have limited property management in place for our rentals now.
My income this year will be such that Real Estate Pro status will really benefit us and I'm curious what success stories folks have heard for a situation similar to ours where an individual was able to claim this status. Seems like documentation (timelogs, etc) is very important in case of audit, as well as meeting the IRS-defined qualifiers (material participation of 750+ hours and over 50% of work done in real estate).
I'm also aware that a mortgage broker has been disallowed by the IRS for this status, however in the case that decided that (Hickam, T.C. Summ. 2017-66) the individual was a broker - not lending their own money - and he was an independent contractor, which I am not.
Feel free to share your stories and scenarios!