Miss This and the IRS May Disallow the Real Estate Professional Status | USTaxAid

Diane Kennedy's Blog

Miss This and the IRS May Disallow the Real Estate Professional Status

Written by Diane Kennedy, CPA on December 6, 2019

Let’s start off with WHY the real estate professional status is so important.

This is applicable to real estate investors who have long term rentals. If you flip property or have vacation rentals, it’s probably not applicable to you.

If you have passive real estate losses (from long term rentals), your ability to take that loss against your other income may be limited.

If your adjusted gross income (AGI) is under $100K per year, you can take a real estate loss deduction of up to $25,000. If your AGI is over $150K, you can’t take any real estate loss deduction. Between $100K and $150K, the amount you can deduct is phased out.

The exception is if you or your spouse is a real estate professional. There is a 3-part test to being qualified as a real estate professional and even IRS auditors get confused sometimes about the details of this.

One thing they are very clear about right now, though, is they want you to prove the number of hours you spend in real estate activities.

They want to see a journal.

That’s what we’ll be talking about in Wednesday’s coaching class, How to Prove the Real Estate Professional Status. This includes a template for a journal you can keep to prove your hours, in case the IRS asks.

We’ll also talk about recent cases and who won and who lost, so you can position yourself for success.

The Real Estate Professional status means less tax.

In fact, if you’re a real estate professional and pay ANY tax, it means one of two things:

  • You don’t own enough real estate, or
  • You don’t know how to maximize the huge tax breaks with the Real Estate Professional status.

You won’t want to miss Wednesday’s coaching class. They are the first and third Wednesday of each month, at 5 pm Pacific.

If you’re not yet a member of coaching, join today at: https://www.ustaxaid.com/coaching-program/!

It’s just $99/month and for that price you receive 2 home study courses per month (value of $200 – $400) plus live coaching where you can ask your tax strategy and implementation questions as well as get strategies for building assets, creating business systems and improving cash flow.

You can also sign up for a personal consultation. If you’re interested, Contact Us.

You’ll want to make sure you download the Real Estate Professional Home Study Course this month! The courses stay up for 3 months. As one is added, one comes off the list.

Act now to make sure you have this one in your library!

Leave a Comment


  • Three weekly emails with free tax updates
  • Exclusive deals on products and services
  • FREE Webinar: Covid-19 and Your 2020 Tax Return