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Article Date:
March 2010

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How to Materially Participate to Deduct Rental Property Tax Losses

If your rental properties produced a tax loss and the $25,000 deduction allowance either is not available to you because you earned too much money or is inadequate, you need to strive for real estate professional status so that you may deduct your rental property losses.


You can be a lawyer, CPA, MD, or business owner and still qualify as a real estate professional. See the article titled “Qualify as a Real Estate Professional to Deduct Rental Losses.”


You achieve real estate professional status in a tax year when you1



work more than 750 hours in real estate trades and businesses, and


have more personal service hours in the rental activities in which you materially participate than you have in your other activities.


You achieve real estate loss deduction status on a rental activity when



you or your spouse is a real estate professional, and


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