No Loss Limit for Real Estate Professionals and Spouses
Tax Tip
losses against their income regardless of how much they or their
spouse earns. People at high income brackets cannot claim losses on
rental activities due to loss limitations, so many of them resort to
becoming real estate professionals, allowing them to deduct unlimited
losses on rental activities.
Real Estate Investors can 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 AGI is $160,000, and as a result, you are not
entitled to any property 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". 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 (
http://www.trexglobal.com).
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Simple FREE to se Web Tools for Real Estate Investors
Tax Tip
losses against their income regardless of how much they or their
spouse earns. People at high income brackets cannot claim losses on
rental activities due to loss limitations, so many of them resort to
becoming real estate professionals, allowing them to deduct unlimited
losses on rental activities.
Real Estate Investors can 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 AGI is $160,000, and as a result, you are not
entitled to any property 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 roperties,and supervising