No Loss Limit for Real Estate Professionals and Spouses


Tax Tip

Real estate professionals can claim unlimited investment property
losses against their income regardless of how much they or their
spouse earns. People at high income brackets cannot claim losses on
rental activities due to loss limitations, so many of them resort to
becoming real estate professionals, allowing them to deduct unlimited
losses on rental activities.

Real Estate Investors can qualify as "real estate professionals" if
they spend at least 750 hours per year on their investment activities.
A real estate sales license is not required and either spouse can
qualify. Real estate brokers, realty sales agents, property managers,
builders, contractors and leasing agents are all considered real
estate professionals if they spent 750 hours on real estate business.

For example, say your AGI is $160,000, and as a result, you are not
entitled to any property loss deductions because your AGI exceeds
$150,000. However, if your spouse manages your real estate properties
and spends more than 750 hours annually supervising the properties,
making management decisions, inspecting roperties,and supervising
property sales and exchanges, then your spouse qualifies as a "real
estate professional". The result is that you and your spouse can claim
unlimited property loss deductions from your properties because one of
you qualifies as a "real estate professional."

To learn how to take control of your Real Estate and Taxes, check out
RealTaxTips at ( ).

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Feb 2, 2011
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Excess Losses for Real Estate Professional

What can be done with real estate losses that are more than my spouse's income. I am a real estate professional. Can I somehow carry them forward?

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