Tax law real estate
Not only is the staff of EBS Consulting taxation experts, but they are real estate investors as well. Carey Lampel personally has owned commercial and residential properties, mobile home parks and apartment buildings. This type of personal investment gives them insight into the tax loopholes available to clients who can claim real estate professional status on their tax returns.
EBS has also represented clients in audits where they had taken real estate professional status. Real estate professional IRS status is an election that can be made on tax returns that allows the client to take the losses from rental properties to offset against ordinary income.
A person does not need to hold a real estate license in order to take this status. Clients can file for this status if the number of hours spent on real estate activities exceeds the time spent on other trades and businesses combined. The professional must also have an income of less than $150,000 to claim this status.
Using entity’s and other tools, there are structures we can use to bring down personal
income below the $150,000 mark to take advantage of this tax law.
The IRS is tough on the real estate professional status because of the excellent write off potential for legitimate real estate professionals. If this status is going to be reported, documentation is imperative to successfully making this claim. Hours worked in both real estate and non-real estate activities must be accurately tracked, not approximated.
Activities must be recorded in appointment books, PDAs, calendars, or through other written means. There are other requirements for real estate professional status that must be met.
Please call us for more information.