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Real Estate Professional
IRS Rules
As of Tax Year 2005
Why care?
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Because if you are a high income taxpayer (AGI > $150,000),
you cannot deduct your rental losses, OR
-
If you make between $100,000 & $150,000, you will be limited
as to how much you can deduct ($1 to $25,000), OR
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If your losses exceed $25,000 in a calendar year, you are
limited to $25,000.
Two Tests
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More than half of the time you spend performing personal
services in ALL trades or businesses is spent in "qualified real estate
activities."
-AND-
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More than 750 hours a year are spent in qualified real estate
activities in which you materially participated. *
* Materially participated means any ONE of the following PER
EACH PROPERTY:
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Worked more than 500 hours on the
property during the tax year OR
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Your participation for the tax year equals substantially all
of the participation including non-owners OR
-
Worked more than 100 hours AND that is equal to or greater
than anyone else OR
-
Qualified as above for any five out of ten past years.
J.D. Sumter & Associates, Inc.
16840 South U.S. Hwy 441
Baylee Plaza - Suite 405
Summerfield, FL 34491
(352) 307-4366
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