In this episode of the Real Estate Professional Status Podcast, I sit down with RE Tax Strategist Nathan Sosa to uncover “The Truth About Grouping” and its role in real estate tax strategy. We explore the nuances of grouping elections, how they apply to long-term and short-term rentals, and why the rules for grouping differ based on property types. Nathan explains how grouping impacts material participation tests, common misconceptions, and why it’s not always as simple as it seems.
Listeners will gain valuable insights into the following:
•The difference between Dash-9 (long-term) and Dash-4 (short-term) grouping elections.
•Why short-term rentals can’t be grouped with long-term properties.
•How grouping affects meeting the 100-hour or 500-hour material participation thresholds.
•The risks of improperly grouping properties and potential IRS challenges.
•Strategies for tracking time across multiple properties to prove material participation.
•Why grouping is a game-changer for scaling your portfolio.
Nathan also shares practical advice for W-2 earners, debunks myths about real estate professional status, and provides actionable strategies for leveraging tax benefits in real estate. Whether you’re a seasoned investor or just starting, this episode is packed with tips to optimize your investments.
Tune in and learn the real truth about grouping—and why it’s critical to get it right.
How to Reach Nathan Sosa:
•LinkedIn: Nathan Sosa
•Twitter/X: @NathanSosaTax
•For additional questions or consulting, connect via DM on either platform.
The Real Estate Professional Status