Dr. Friday explains that meeting the 750-hour test alone does not guarantee real estate professional status. She warns that taxpayers with full-time non-real-estate jobs often face IRS disallowance.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Real estate professional status, wow, this is a big question.
I have a lot of people that swear they’re real estate professionals because they put in more than 750 hours. That is only part of it.
If you have a full-time job and you want to claim that you’re a real estate professional, you’re gonna find out it doesn’t work. The IRS will disallow it.
If you are a licensed real estate person and you’re doing it 24-7 like most of us do our business, sure, you’re a real estate professional. But sometimes there’s pros and sometimes there’s cons.
Do you really want to be paying self-employment tax on a rental property? You may have to if you’re treated as a real estate professional.
Need help? Go to drfriday.com.
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