Those who meet the IRS' definition of a real estate professional have their real estate investments treated as active income. To meet this definition, you must spend at least 750 hours per year working in the real estate industry. Paid employees who own at least 5 percent of a real estate business also are considered a professional. If you are a full-time developer for your own account or a full-time real estate agent paid only on commission, you are a real estate professional. In these two instances, you can use losses from your investments to offset income you make in other real estate business activities.
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