The Daily Tax Tip Spotify Podcast and/or WordPress Blog Post discusses when Educational Activities Do Not Count in Determining Status as Real Estate Professional.
In Johnson v. U.S., 2021 PTC 182 (9th Circuit 2021), the Ninth Circuit affirmed a district court’s holding that a married couple was not entitled to deduct rental property losses as non-passive losses. The court concluded that the wife could not count time spend on educational activities in determining the number of hours spent in real property trades or businesses in which she materially participated.
As a result, petitioner did not meet the more than 750 hours requirement in Code Section 469(c)(7)(B).
Practice Tip: Per Johnson v. U.S., 2021 PTC 182 (9th Circuit 2021) studying for a real estate license does not count for the 750 Material Participation qualifying hours.
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