I’m hoping to get some advice about real estate professional status. My wife puts a lot of time into managing three student rental properties we own. I work a regular job with a W2, but she’s thinking about applying for this status.
We’re wondering if it’s worth it. Would getting this status help us save money on taxes? Has anyone here gone through this process or know the benefits?
Our main goal is to keep more of the profits from our rentals. Any insights or experiences would be super helpful. Thanks in advance for your thoughts!
Real estate professional status can be a game-changer for your tax situation, but it’s not without its challenges. Your wife might qualify if she spends 750+ hours annually on real estate activities and more time on that than any other job. The big advantage is potentially offsetting your W2 income with rental property losses, which could lead to significant tax savings.
However, be prepared for increased IRS scrutiny. You’ll need meticulous record-keeping to prove the hours worked. Also, consider the impact on other deductions and credits you might currently claim. It’s not a decision to make lightly.
I’d strongly recommend consulting with a tax professional who specializes in real estate. They can run the numbers for your specific situation and help you weigh the pros and cons. It could be very beneficial, but it’s crucial to understand all the implications before proceeding.
yeah, real estate pro status can be sweet for taxes. my buddy got it and saves a ton. but its tricky - ur wife needs to log mad hours and prove shes legit. might be worth it if u guys are serious bout the rentals. def talk to a tax pro tho, they’ll know the ins and outs. good luck!