real estate professional

Also found in: Acronyms.

real estate professional

Usually refers generically to a trained and licensed person who makes his or her living in some aspect of buying,selling, or managing real estate.The IRS has a specific definition applicable to whether one is exempt from the passive activity rules. For IRS purposes, a real estate professional is any person who meets the following requirements:

1. More than half of the personal services the taxpayer performed in all trades or businesses during the tax year were performed in real property trades or businesses in which he or she materially participated.

2. The taxpayer performed more than 750 hours of services during the tax year in real prop- erty trades or businesses in which he or she materially participated.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
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 in Sec.
"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.

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