Real Estate Professional Tax Loophole Question - Posted by analysis paralysis

import · September 10, 2003, 5:30pm

Posted by ANALYSIS PARALYSIS on September 10, 2003 at 20:22:10:

Thanks, Ed, appreciate your input.

import · September 10, 2003, 5:30pm

Posted by analysis paralysis on September 10, 2003 at 17:30:30:

OK, I just read Diane Kennedy’s article on qualifying as a Real Estate Professional, and she provides several litmus tests. Here’s the first:

Does a company engaged in a real estate activity in which you own 5% or more of the company currently employ you?
If the answer is yes, you are a Real Estate Professional.

My question is this: If I have a day job, but my wife & I formed an LLC because we are planning to invest in real estate, does having the LLC meet the letter of this criterion? Does the LLC have to have some kind of statement in the Articles that direct its operation toward Real Estate?
Thanks in advance for any input.

import · September 10, 2003, 8:05pm

Re: Yes , but - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on September 10, 2003 at 20:05:28:

Yout LLC will meet the requirements once the entity starts to do business. You mention “planning” to invest in real estate. The planning and start up are not business activities and are looked at as the investment in the LLC. Once the LLC actually does some business then the entity would meet the required tests.