Real Estate Tax & Insurance Article Knowledge Base

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A Real Estate designation of Professional status is handed out by the IRS which is based upon the amount of hours you work doing real estate activities as compared to other activities. This does not mean that you must turn into a real estate agent.. You do not need to go around showing houses or putting up "for sale" signs. However if you qualify for this status designation, then you are allowed to deduct a no-limit amount of paper real estate loss against other income, and it's immaterial how much money you earn or how much money your real estate loss amounts to.

To qualify for the Professional Real Estate designation, you must show how your time is allocated between regular income activities and activities involving real estate . A qualified activity in real estate is any activity in which you "lease, manage, construct, develop, redevelop, reconstruct, acquire, convert, operate, rent, or sell" real estate. Keep in mind that the key thing is that you carry out personal services within these range of activities, although you don't necessarily need to be doing the work. You can be meeting, supervising, planning, the functions that go into actively running a business. Browse through all of these interesting tax articles on real estate