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re: Real estate professional benefits in Investment property, need expert advice
Posted on 4/13/14 at 11:26 am to I Love Bama
Posted on 4/13/14 at 11:26 am to I Love Bama
Owning rental real estate doesn't really require you to go see a professional.
Owning rental real estate and claiming real estate professional, I'd go visit someone. Even if just for a year to get it set up properly.
In a nutshell, for most people, real estate rental is a passive activity. Thus, there are limits to how much losses, if any, are deducted against your other income each year. The main reason for this treatment is that people don't spend a lot of time on their real estate rentals.
This is oversimplfied, but basically there is an election available that allows you to combine the time you spend on all real estate - including being a realtor - into one "activity", thus, removing the passive "taint" on the rental losses.
The nut of all of this is that you can take your rental losses against non-rental income.
There is an election that must be filed the first year you do this, and you have to make sure your wife qualifies. Thus, why you really need to go see a pro.
File an extension, wait a week or two, and call somebody. This is one of those times where it's worth a few hundred bucks to make sure you get it right.
Owning rental real estate and claiming real estate professional, I'd go visit someone. Even if just for a year to get it set up properly.
In a nutshell, for most people, real estate rental is a passive activity. Thus, there are limits to how much losses, if any, are deducted against your other income each year. The main reason for this treatment is that people don't spend a lot of time on their real estate rentals.
This is oversimplfied, but basically there is an election available that allows you to combine the time you spend on all real estate - including being a realtor - into one "activity", thus, removing the passive "taint" on the rental losses.
The nut of all of this is that you can take your rental losses against non-rental income.
There is an election that must be filed the first year you do this, and you have to make sure your wife qualifies. Thus, why you really need to go see a pro.
File an extension, wait a week or two, and call somebody. This is one of those times where it's worth a few hundred bucks to make sure you get it right.
This post was edited on 4/13/14 at 11:28 am
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