Hi Carl,
I've been going through some of my older posts on this forum to refresh myself on how taxes for landlords work. My original post was regarding deducting expenses associated with a trip - I decided to NOT expense it as it may be more hassle/risk than it's worth.
But you asked some questions that I must have forgotten to answer. Questions that could give me clarity on whether the IRS considers me a Real Estate professional or not.
I am not a licensed contractor. Basically I own rental properties and gut renovate them myself. I do hire laborers to help with maybe 15% of the actual physical work. I spend 100% of my working time on this endeavor. And I spend over 1700 hours a year working my real estate business in some form or other. 90% of that work is renovating the place. I do plan on logging my daily activities in a journal-app because it sounds like something the IRS is looking for.
I own the properties. I don't have a business entity. And because I do not pay myself, I don't have w2 income or schedule C income. Elsewhere on this forum someone astutely pointed out paying myself as a contractor would incur Self employment taxes in addition to Federal and state taxes.
I suppose I am running a sole proprietorship. I do plan on forming an LLC in the near future.
LMK if this answers your questions.
