Real Estate Professional Designation
NewKidinTown2; I just read your reply regarding the real estate professional designation. What do you have to do in order to get this designation for IRS purposes? Do you just claim the amount of time you spend in real estate or do you have to obtain this designation through the IRS?
You have to be engaged in an active income activity that is real estate related. You must be a principal (have an ownership interest) of the business engaged in that activity, not just an employee. Additionally, you must "materially" participate in the business.
You must spend more time throughout the year in this real estate related activity than you spend in all other activities combined, AND that time must exceed 750 hours throughout the year.
The "real estate professional" status is claimed by the individual, not bestowed by the IRS. It is up to the individual to defend his claim if challenged by the IRS.[ Edited by NewKidinTown2 on Date 01/07/2005 ]