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You qualify as a real estate professional for the tax year if you meet both of the following requirements. More than half of the personal services you perform in all trades or businesses during the tax year are performed in real property trades or businesses in which you materially participate. You perform more than 750 hours of services during ...
2 Best answer. tagteam. Level 15. @Critter-3 is correct; you almost certainly have years of passive activity losses (PALs) from your rental real estate activity (ies). Qualifying as a real estate professional at this point will not somehow transform those passive losses incurred in prior years into nonpassive losses.
You are considered to be a real estate professional (i.e., in a real property trade or business) if: you must materially participate in each rental real estate activity unless you filed an election to group all rental real estate activities as one (and materially participate in that activity). A "real property trade or business" means any real ...
Turns out you can qualify for the QBI deduction, as long as your rental activities constitute a trade or business. Generally, this means each rental real estate enterprise (a rental property or group of similar rental properties, including K-1 rental income) must satisfy these three requirements: Rental services can be performed by the owners ...
The most accurate way would be to use Form 8829 to calculate your deductible expenses and enter those expenses on Line 19 Other expenses. The following TurboTax link has information on how to prepare Form 8829. You will have to complete a "mock" Schedule C to generate Form 8829 with your home office deduction.
Full Service might be able to assist you with this because you just need to file a statement that you are a qualifying taxpayer (a real estate professional) for the tax year, are making the election under Sec. 469(c)(7)(A), and then aggregate your properties.
1 Best answer. AmeliesUncle. Level 14. Yes. If your rental activity rises to the level of a "Trade or Business" and you "Materially Participate" in that business, the Net Investment Tax does not apply. Both of those requirements are pretty much part of being a Real Estate Professional. View solution in original post.
If you are not a real estate professional for 2020, there is no reason to make the election for 2020. If you are a real estate professional and make the election, Reg 1.469-9(g)(1) states "..In years in which the taxpayer is not a qualifying taxpayer [real estate professional], the election will not have effect and the taxpayer's activities ...
The "election" is located in the (Step-by-Step process) Rental Properties and Royalties section. Click the Federal Taxes tab, click Wages & Income, scroll down to Rental Properties and Royalties and then click the Start button. During the "Rental" interview, you will be presented with a page identical to the one that appears in the screenshot ...
Over the last several years, the IRS has been researching the topic of Real Estate Professional and there is now a very detailed internal IRS publication used by auditors to determine Real Estate Professional status and has now very detailed information about what activities qualify as valid activities for a Real Estate Professional.