Should I be a real estate professional status for tax purposes?

[Kip Cline]

What are the downsides of electing to be treated as a real estate professional for taxes? Would this make my real estate rental income become active income instead of passive? Is this taxed differently? I do not have high income from other areas of work and my rentals all cash flow positively even after depreciation so I do not show any real estate losses that would offset income from other areas.

I am also a real estate agent, but only do half a dozen deals a year. Would this automatically make me have to be treated as a real estate professional?

[Christian Stoecklein]

@Kip Cline you will need to carefully document the hours to make sure you can prove the compliance with the requirements. But it's very helpful if you can. You will get to deduct your real estate losses. You can do cost segregation to increase your depreciation costs. It's worth your time to fully investigate this.

Christian