No Loss Limit for Real Estate Professionals and Spouses

Discussion in 'US Taxes' started by Tax Tip, Aug 10, 2008.

  1. Tax Tip

    Tax Tip Guest

    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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    Tax Tip, Aug 10, 2008
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  2. Tax Tip


    Feb 2, 2011
    Likes Received:
    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?
    Oceanhosam, Feb 2, 2011
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