How do you handle real estate professionals

[BIGPETE]

I have a client who thinks they should be classified as Real Estate Professionals. they have 16 separate rental units.

I checked the box  for RE professionals on their Federal information worksheet but nothing happened, there were no errors and it did not direct me to any other place on the return.

what are the main benefits of being a RE professional?

Could one of you wonderful people please help guide me thru this process?

As you can probably tell I have never had to deal with a RE professional

Thanks in advance

[Just-Lisa-Now-]

https://www.forbes.com/sites/forbesrealestatecouncil/2019/12/06/tax-advantages-for-real-estate-profe...

[qbteachmt]

"what are the main benefits of being a RE professional?"

I think perhaps the question should be: How do I know if this person is an RE professional or just a landlord?

[sjrcpa]

And be aware that IRS says this is one of their audit focus areas.

[BobKamman]

...as if IRS has any more auditors than they did in 1952.  Do the right thing because it's the right thing, not because there's any likelihood of anyone at IRS noticing if you don't.  

[Norman2001]

This is a very helpful memo for the definition of a REP

https://www.irs.gov/pub/irs-wd/201427016.pdf

[BIGPETE]

How do your attach a statement, under section 469(c)(7)(A), to your return if the taxpayer elects to treat all 16 of their rental units as one real estate activity. The paragraph below came directly from the IRS instructions for Schedule E.  Any help will be greatly appreciated!!

If you qualify as a real estate professional, rental real estate activities in which you materially participated are not passive activities. For purposes of determining whether you materially participated in your rental real estate activities, each interest in rental real estate is a separate activity unless you elect to treat all your interests in rental real estate as one activity. To make this election, attach a statement to your original tax return that declares you are a qualifying taxpayer for the year and you are making the election under section 469(c)(7)(A). The election applies for the year made and all later years in which you are a real estate professional. You can revoke the election only if your facts and circumstances materially change.

[qbteachmt]

"Any help will be greatly appreciated!!"

You asked twice. The other topic here:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/election-statement-for-...

is being answered. It helps not to have a question in multiple places, as others  cannot tell if or what is being answered already. It helps avoid redundancy from the volunteer peers that are trying to be helpful.

Make sure to read the topic where you are getting help.