Real Estate Professional Classification | Mark J Kohler | Tax & Legal Tip
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Real Estate Professional Classification | Mark J Kohler | Tax & Legal Tip


Hi mark Kohler here Let’s talk about the real estate professional classification this can be one of the most powerful tax strategies For an entrepreneur real estate investor or even a corporate w-2 employee now. Just today literally just this morning I had a phone call with a client across the country that had their tax return filed by a CPA that check-the-box Passive on their tax return, and they were unable to take all the write offs from the rental property It was costing him close to forty thousand dollars in additional tax because the CPA screwed up the election on their tax return Now this client qualified as a real estate professional And he was able to amend his tax return with his wife and save a ton of money So let’s go through the basics were quicker there are three classifications or boxes to check if you will on a tax return Passive active or real estate professional if you check passive or active Then your real estate losses are going to be limited to some extent and that’s okay Those losses will be used sometime in the future But if you qualify as a real estate professional then all your losses are a hundred-percent deductible And that’s where the money’s at now There’s two tests to qualify as a real estate professional First you have to put in seven hundred and fifty hours a year doing real estate Managing your rental properties doing your real estate business what-have-you number two real estate has to be your primary occupation Meaning, you’re a realtor a contractor a developer doing real estate Just managing your own real estate, but you can’t have that 40 hour a week day job because you won’t qualify But if you’re married and your spouse qualifies you then both qualify So what’s the benefit? You’re able to take all of those real estate losses from depreciation mortgage insurance travel dining entertainment all that good stuff as a deduction Against your other income now a lot of people say well mark should I be a real estate professional it comes down to two things? One do you own rental real estate and number two are the rental real estate losses you have now being Limited for some reason or another because your passive or active Now this is a big topic I just wanted to expose you to it and this is something you should be talking to your tax professional about so think about real estate professional if you own real estate big today If you thought that information was amazing and helpful I have so much more to share with you Please look at the links below and head to my website Mark J Kohler comm you can subscribe to my weekly newsletter Check out my weekly radio show I have my online videos for tax and legal strategies that will save you thousands ways to learn QuickBooks with my fun videos online and Also, if you enjoyed it, please leave a comment and give it a like and follow me on YouTube I promise that these videos will change your life. Thanks so much

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