did you claim real estate tax professional status in 2023 but not 2024? For 2023, if you did, the real estate activities would not be passive and not flow to form 8582. So you would be left with those passive losses in 2023. if not, rental income with active participation should flow to 8582 line 1a, but with material participation should flow to 8582 line 2a and would offset the other passive business losses.
seems something is wrong with 2023
the special QBI rule for rental real estate does not transform it into a nonpassive activity.
rules to be a REP
1.Time Commitment: You must spend more than 750 hours during the tax year on real estate activities. This includes tasks such as property management, development, leasing, and brokerage.
2. Primary Focus: More than half of your total working hours must be dedicated to real estate. For example, if you work 1,500 hours a year, at least 751 hours must be in real estate activities.
3. Material Participation: You must demonstrate material participation in your real estate activities. This can be established by meeting one of the IRS's seven tests for material participation, with the most common being that you participate for more than 500 hours in the activity during the tax year.
