Self-Rental for Real Estate Professional

[jacob@JZGCPA.com]

My software is allowing this which makes me want other opinions:

My software is allowing the Self-Rental Loss to become non-passive for an RE Professional.

Self-rental losses are normally categorized as Passive, however Real Estate Professionals' rental activities are deemed to be non-passive.
It is appearing that the RE Professional Rule is superseding the Self-Rental Rule, and I can't find any guidance that says otherwise.

[TaxGuyBill]

Self-rental losses are normally categorized as Passive,

The special self-rental rules make the gain non-passive. The self-rental rules don't change the usual rule that ALL rental losses are normally categorized as Passive. Being a Real Estate Professional (and Materially Participating in that rental) make rentals non-passive.

So the software seems correct.

[ATSMAN]

Software is correct in treating the rental losses as non passive for RE Professional. Have you made sure that the taxpayer is eligible to be a RE professional by passing both the test conditions?

I have run into situations where the qualification was very questionable?

[terryats]

Here is a great article from Tax Adviser on real estate professionals:

https://www.thetaxadviser.com/issues/2017/mar/navigating-real-estate-professional-rules.html