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Tips from T-ReX

Blog by T-ReX Global
Fremont, California
T-ReX creates simple Web Tools for real estate investors to save them TIME and MONEY

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No Loss Limits? Unlimited Tax Deduction?
Posted at Tips from T-ReX by T-ReX Global
Jul. 10, 2008
Categorized in: TaxTips
Tagged with: material participation, real estate professionals, taxtips
Starred by: 1 Member
No Loss Limit for Real Estate Professionals and Spouses?

Real Estate Investors qualify as "real estate professionals" if they spend at least 750 hours per year on their investment activities. A real estate sales license is not required and either spouse can qualify. Real estate brokers, realty sales agents, property managers, builders, contractors and leasing agents are all considered real estate professionals if they spent 750 hours on real estate business.
For Example:
Say your Adjusted Gross Income (AGI) is $160,000, and as a result, you are not entitled to any rental investment loss deductions because your AGI exceeds $150,000.
However, if your spouse manages your real estate properties and spends more than 750 hours annually supervising the properties, making management decisions, inspecting properties, and supervising property sales and exchanges, then your spouse qualifies as a "real estate professional".
Ride the Loss!
The result is that you and your spouse can claim unlimited property loss deductions from your properties because one of you qualifies as a "real estate professional."

To learn how to take control of your Real Estate and Taxes, check out RealTaxTips at TReXGlobal.com.
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