Real estate professional

[travis-mclendon]

Would I be considered a real estate professional? I have a rental home that I materially participate in. I market the house, lease it, operate, and manage it. My day job I am a mortgage banker lending money for residential real estate purchases.

[PatriciaV]

You are considered to be a real estate professional (i.e., in a real property trade or business) if:

1. more than one-half of the personal services you provided during the year were performed in a real property trade or business in which you materially participated; AND
2. the number of hours in which you materially participated in this real property trade or business was more than 750 hours; AND
3. you must materially participate in each rental real estate activity unless you filed an election to group all rental real estate activities as one (and materially participate in that activity).

A "real property trade or business" means any real property development, redevelopment, construction, reconstruction, acquisition, conversion, or rental operation, management, leasing, or brokerage trade or business.

Personal services performed as an employee are not treated as being performed in a real property trade or business unless you are a more than 5% owner of the trade or business.

For joint return purposes, the eligibility requirements are considered met if either you or your spouse separately satisfy the requirements.