Wayne Courreges IIIManaging Principal, CREI Partners, CREI Partners, CREI Partners, LLC · Disciplined Passive Real Estate. Transparent Leadership.

Real Estate Professional Status Can Move Passive Income to Active in your Tax Return

Name: Real Estate Professional Status Can Move Passive Income to Active in your Tax Return
Uploaded: 2023-11-10T01:02:14+00:00
Duration: 58 s
Channel: Wayne Courreges III
Description: This content was created by Wayne Courreges III, CPM®. This content was uploaded by Wayne Courreges III, CPM®. This is a YouTube video titled "Real…

10 Nov 2023 · 1 min

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This content was created by Wayne Courreges III, CPM®. This content was uploaded by Wayne Courreges III, CPM®. This is a YouTube video titled "Real Estate Professional Status Can Move Passive Income to Active in your Tax Return" (created 2023-11-10). The excerpt is a single-speaker explanation (labeled SPEAKER A) about tax strategies for real estate investors: using a grouping election to include syndication distributions in one’s overall real estate business to convert passive losses into active business losses, a common spousal strategy where one spouse with high W-2 income benefits while the other claims real estate professional status, and the requirements/risks for qualifying (meeting the hourly/main-activity tests and avoiding claiming the status while holding a W-2 job to prevent IRS audit).

Chapters

He was able to do a grouping election on his taxes to also group in that syndication distributions as part of his business, overall real estate business. And so that allowed him to dump that whole green bucket, this passive bucket into the red bucket. And this is a very powerful strategy that a lot of couples use where one has a really high W2 income, they also own rental property and the other spouse will get real estate professional status. And you don't have to be a realtor. You don't have to get any sort of certification. You just have to meet the criteria. So you have to put in a certain number of hours. It has to be the main thing that you do. So you can't have a W2 job and claim real estate professional status. The IRS will come after you and audit you for that. So don't do that. But otherwise, as long as you're meeting the hourly requirement, it's pretty easy to do this.