As such, more real estate professionals
are turning to the internet to reach a wider audience for their listings.
The election is accomplished by filing a statement with an original, timely filed tax return (as opposed to an amended return) in a year in which the taxpayer claims to qualify as a real estate professional
. The election is binding for that and all future years, absent a material change in the taxpayer's facts and circumstances--such as the sale of an interest in one of the activities.
A key element of confusion, as highlighted by this CCA, is the separate application of the real estate professional
test in Sec.
However, a taxpayer's rental activity is not treated as perse passive if he or she satisfies the requirements to be considered a real estate professional
"What this tells us is that most people use a wide variety of sources in searching for a home, but the single most important resource is a real estate professional
," says Whatley.
While the 50% and 750-hour tests must also be met to qualify as a real estate professional
, the court held that the IRS in this case did not argue those points; instead, the Service argued only that a trust can never be a real estate professional
and that the Aragona trust did not materially participate in real property trades or businesses.
A taxpayer's personal services and material participation in real property trades or businesses are critical requirements of being a real estate professional
. Consequently, Regs.
She worked full time as a real estate agent at Century 21 and as such designated herself as a real estate professional
on her tax return.
In 1996, Kosonen did the same thing, except he also attached a statement indicating that he qualified as a real estate professional
and elected to treat all his rental real estate activities as one activity.
Do you consider yourself a real estate professional
? The IRS may have a different definition--and it may be the difference between costing or saving you a significant amount of tax dollars.
Real Living Real Estate Professional
's Redding real estate agents are licensed agents who have been energetically assisting the Redding area since its conception.