Dr. Friday explains the tax differences between professional real estate investors and casual investors, highlighting the 750-hour rule.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Real estate investments—I love investing in real estate personally. But am I a professional real estate investor? No. I don’t spend more than 750 hours a year on real estate because I have a full-time job. It’s very hard to justify professional status. There are advantages if you qualify. If you have a lot of rental properties, manage them yourself, and can document your hours, you may be able to take more losses than a casual investor. It’s very important to understand the difference between being a professional real estate investor and a passive investor for tax purposes.

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