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Archive for July, 2011

PostHeaderIcon Real Estate Professional Relief

Last month, a pretty important Revenue Procedure came out.  In Rev. Proc. 2011-34, we get some updated guidance on fixing making a late election to aggregate your rental real estate activities when determining whether you qualify as a Real Estate Professional or not.  To qualify, you must meet a three pronged test (I’ll probably dedicate an entire blog post to the rules here but in the meantime, I took part in a conference call on this subject a few months ago that’s worth listening to). One of those tests is that you materially participate in each real estate activity.  By making an election, you can choose to aggregate your activities so all of them are effective used in total to determine whether you meet the test or not.

It’s fairly common to miss the election and the consequences can be severe.  With this Rev. Proc., it’s not a lot easier to make a late election to help cover yourself.