That said, the rules regarding rental activities, including rental real estate activities, can be somewhat confusing.
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For 2007 petitioner contends that she spent a total of 1, 790 hours on real estate activities.
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For 2008 petitioner contends that she spent a total of 1, 680.75 hours on real estate activities.
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This is due to the fact that for real estate professionals, rental income from rental real estate activities is earned through active participation in the renting on the properties.
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Having said this, the 3.8% Medicare Surtax applies to rental real estate activities in a slightly different manner than the general income tax rules (i.e. those under Code Chapter One) do.
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The judge in their case dismissed the Hannas' 89-page reconstruction of their real estate activities as an "impermissible ballpark guesstimate" that didn't prove Susan spent more hours on real estate than on computers.
Of those hours, petitioner contends that she worked 1, 511.25 hours on real estate activities related to the Florida property and 169.5 hours related to the New Jersey property and the Florida property combined.
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Of those hours, petitioner contends that she worked 1, 525 hours on real estate activities related to the Florida property and 265 hours related to the New Jersey property and the Florida property combined.
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However, a taxpayer who qualifies as a real estate professional is not necessarily engaged in a trade or business (within the meaning of section 162) with respect to the rental real estate activities.
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To substantiate her claim that she was a real estate professional, petitioner introduced three logs reflecting the amount of time she purportedly spent on rental real estate activities during each of the years at issue.
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Namely, the IRS states that rental real estate activities income might be included in either Part A of the NII composite, which includes general sources of investment income, and Part B, as being passive to the taxpayer.
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However, if the rental real estate activities of the real estate professional are not section 162 trades or businesses, the gross income from rents derived from such activity will not be excluded under section 1411(c)(1)(A)(i) by the ordinary course of a trade or business exception.
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If the rental real estate activities are section 162 trades or businesses, the rules in section 469(c)(7) and Sec. 1.469-9 will apply in determining whether a rental real estate activity of a real estate professional is a passive activity for purposes of section 1411(c)(2)(A).
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In fact the most surefire ways of making sure that investments are active is to meet the requirements for a real estate professional (spending at least 750 hours per year materially participating in real estate activities and having real estate activities be over 50% of your total trade and business activities).
It is also prime real estate for winter activities like snowshoeing and tubing, receiving an average 680 inches of snow each year.
Property managers plan, direct, or coordinate the selling, buying, leasing, or governance activities of real estate properties, according to the U.S. Bureau of Labor Statistics.
The practice is, appropriately, a postmodern religion that operates in the digital world: It has never had significant church real estate nor run formal fundraising activities but is driven entirely by volunteers organized over the Internet.
However, the real estate professional special rules that apply when rental activities are aggregated to achieve material participation status suggest trade or business treatment.
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