Sorry, You Can’t Get There from Here: The Untenable Goal of Using Short-Term Rental Real Estate to Attain Real Estate Professional Status
36 Pages Posted: 21 Sep 2017
Date Written: May 8, 2014
This Article addressed the surprisingly controversial issue of whether the law allows taxpayers to include hours worked relating to short-term rental real estate as hours associated with a real property trade or business. An example is whether operating a Bed and Breakfast is a business or a real estate venture. The classification matters because if a taxpayer has sufficient hours, the taxpayer may then qualify as a real estate professional under I.R.C. § 469(c)(7). Real estate professional status usually entities the taxpayer to currently deduct passive activity losses. The Article concluded that hours devoted to short-term rental real estate simply do not qualify for real estate professional status.
Keywords: Tax Policy, Tax Law, Real Estate Professional, Passive Activities, Short-Term Rental Real Estate, Taxation, Federal Taxation, U.S. Tax Court
Suggested Citation: Suggested Citation