What is Real estate professional?
In short
A taxpayer who spends more than 750 hours a year, and more than half of their working time, in real property businesses in which they materially participate is a real estate professional, so their rentals aren't automatically passive.
Key takeaways
- Rental losses can offset other income if the taxpayer also materially participates in the rentals.
- On a joint return, one spouse must meet the tests alone.
- Detailed time records are needed to support the status.
Where it's tested
TCP: Individual Tax Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A taxpayer sells stock at a $10,000 loss on December 10 and repurchases the same stock on December 28 of the same year. What is the tax result?