The Real Estate Professional Status
What Hours Counts For REPS? - Ryan Pulice
Nov 14, 2023
In this engaging discussion, Ryan Pulice, a Virginia-based tax and accounting expert specializing in real estate tax planning, unpacks the intricacies of Real Estate Professional Status. He clarifies how construction activities can shape your status and the importance of material participation for tax benefits. The episode delves into the complexities of tracking qualifying hours, including travel time and meticulous record-keeping. Ryan also shares legal precedents and practical tips for navigating IRS guidelines, making this a must-listen for real estate professionals.
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Quick takeaways
- To qualify for real estate professional status, investors must allocate over 50% of their working time and complete 750 hours in real property trades.
- Material participation is crucial for real estate investors to transform rental activities from passive to active, directly impacting tax liabilities significantly.
Deep dives
Understanding Real Estate Professional Status
Real estate professional status is crucial for investors looking to utilize tax benefits. To qualify, individuals must demonstrate that over 50% of their working time is dedicated to real property trades or businesses and complete at least 750 hours in those activities. Construction-related activities also count toward this status, allowing those in the field to benefit from these regulations. However, property owners must show they materially participate in their rentals after qualifying to fully leverage the advantages of their real estate professional status.
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