Tax Court finds property owner wasn’t a “real estate professional”
Abstract: A property owner who qualifies as a “real estate professional” stands to reap more tax benefits than ever these days. Those who satisfy the requirements may be able to offset some nonrental income with rental losses, as well as avoid the new 3.8% Medicare tax on net investment income. Satisfying the requirements, though, is no small task. This article looks at a court case in which the owner and manager of rental units recently learned that lesson the hard way. A sidebar discusses the tax penalty he had to pay.