Norm is a real estate professional with a real estate trade or business as defined in the tax law. He has $150,000 of business income and $50,000 of losses from actively managed real estate rentals. How much of the $50,000 in losses is he allowed to claim on his tax return?

Question

Quizplus · Accepted Answer

Norm can claim the full $50,000 in losses from his actively managed real estate rentals because he is a real estate professional. This status allows him to bypass the passive activity loss rules that typically limit loss deductions for real estate activities.

Norm Is a Real Estate Professional with a Real Estate