Your rental property provides shelter for your tenants.
And it can also provide a nice tax shelter for you if you know how to play your cards right.
One great way to make sure your rental properties stay tax deductible is for you or your spouse to qualify as a “real-property trade or business.”
What does that involve? Is it difficult to attain this status?
We’ll explain everything you need to know when you read my new article called Tax Tips: Tricky Step 1 to Making Your Rental Property Tax Deductible.
Here’s how to prove you’re in the “real-property trade or business” for tax-deduction purposes:
Step #1: First, you’ll need to identify the rental properties and other real estate trades or businesses in which you and/or your spouse “materially participate.” We’ll explain everything in detail when you read the full article.
Step #2: You’ll have to pass the “50 percent test.” In other words, you’ll have to spend more than half of your “personal service” work-time on the identified material-participation rentals, trades, and businesses. Confused? We’ll unconfuse you for sure when you read the full article.
Step #3: You’ll have to perform more than 750 hours of “service” on the identified material-participation rentals, trades, and businesses. What does the IRS consider “service” to be? All will be revealed when you read the full article.