My wife is a real estate agent (independent contractor) and spends 750+ hours per year doing that. She and I also own out-of-state rental properties, and she manages them all, including property management, tenant selection, leases, hiring people for maintenance and improvements, including traveling to do some of this work. I think of these as 2 separate activities, but I'm not sure if they are accounted for separately.
1) Does the time spent doing real estate and managing our rentals have to be accounted for separately?
2) Since she spends 750+ hours doing real estate, does it matter how much time she spends managing the rentals?
3) Do we need actual daily time logs for these activities, real estate and rental management?
4) Do we separate miles driven doing real estate from miles driven out of state to manage the rentals?
Finally, we are planning to set up her real estate LLC as an S-corp. Will this impact how the rental property management is deducted?
Thanks for any assistance, or if you can direct me to appropriate IRS bulletins!
