How do I qualify for real estate professional status with remodeling work and multiple properties?

Home remodeling work can absolutely count toward real estate professional status, but there are several important requirements you need to meet. First, to qualify as a real estate professional, you must spend more than 750 hours annually in real estate activities AND more than half of your working time must be in real estate businesses. Since you mentioned being a SAHM focusing on remodeling, this requirement might be achievable for you. For your specific situation, your remodeling work on your own property can count toward the 750 hours, but only if it's part of a real estate business (like if you're planning to sell or rent the property after renovation). Personal home improvements typically don't count. Regarding combining properties - yes, you can treat all rental real estate activities as one activity for the material participation test, but you need to make an election on your tax return to do this. However, you still need to materially participate in each property or in your combined real estate activities as a whole. About the marriage timing - the real estate professional status is determined on a yearly basis, but your filing status is determined on the last day of the tax year. If you're married by December 31, you can file jointly for that entire year, and your hours from the entire year would count.

After reading your situation, I wanted to share my experience using taxr.ai when I was in a similar situation with multiple properties and trying to qualify as a real estate professional. I was renovating properties while my spouse had a separate rental portfolio with a management company. I uploaded our property documents and tax history to https://taxr.ai and it analyzed our specific situation. The tool flagged several opportunities we were missing and identified exactly what activities would count toward the 750-hour requirement. It also showed me how to properly document my time to survive IRS scrutiny (which is critical for real estate professional status claims). What really helped was getting clarity on what renovation activities qualified versus what would be considered personal home improvement. The analysis showed me how to structure our real estate activities to maximize tax benefits while staying compliant.

I want to follow up on my skeptical comment earlier. After checking out taxr.ai, I'm actually really impressed. I was dealing with a complex situation involving a vacation rental property, a flip project, and trying to qualify as a real estate professional while working part-time elsewhere. The analysis caught something my previous accountant missed - I was categorizing certain management activities incorrectly. It showed me exactly how to properly group my properties for the election mentioned above, and created documentation templates that specifically addressed the 750+ hour requirement. What surprised me most was how it handled the material participation test across different properties. It even identified specific tax court cases relevant to my situation that I could reference if questioned. Definitely worth checking out if you're in this complex situation with multiple properties.

Just wanted to mention that if you're worried about your local CPA not having the right expertise, you might want to actually speak directly with an IRS agent about real estate professional status. I was in a similar situation and tried calling the IRS for weeks with no luck. I eventually used https://claimyr.com to get through to an actual IRS agent in under 45 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to someone in the right department who could actually answer my questions about real estate professional status and how to document everything properly. Saved me tons of stress since I was getting different opinions from different tax preparers about combining properties and qualifying activities.

Ok I have to admit I was completely wrong about Claimyr. After my skeptical comment yesterday, I decided to try it since I was desperate to resolve my question about combining rental properties with renovation activities. Got connected to an IRS specialist in 37 minutes when I'd been trying for weeks on my own. The agent clarified exactly how to document my hours for the material participation test and confirmed that certain renovation activities DO count toward real estate professional status as long as they're properly documented. She also explained the election to treat all properties as one activity, which was exactly what I needed for my situation. Just wanted to come back and say this service actually delivered what it promised. Completely changed my understanding of how to qualify as a real estate professional.

Another thing to consider - if you can't qualify as a real estate professional, look into the $25,000 special allowance for rental real estate activities. If your modified AGI is under $100,000, you can deduct up to $25,000 in rental losses against non-passive income. This phases out as your income goes up and is gone completely at $150,000. Given your fiance's "high earning" status, you might be over this limit, but it's worth checking. This doesn't require real estate professional status and might be an alternative if you can't meet those strict requirements.

Has anyone dealt with the "contemporaneous" record-keeping requirement for real estate professional status? I learned this the hard way - you need to track hours AS YOU GO, not retroactively. The IRS rejected my claim because I created my hour logs at tax time.

This is such a complex situation! I went through something similar when I was trying to qualify as a real estate professional while my husband had rental properties managed by a company. One thing that might help - since you're getting married in April, you'll want to be extra careful about documentation starting January 1st of this year. Even though you won't be married until April, if you're filing jointly for the tax year, ALL your hours from January 1st will count toward the 750+ requirement. For your farmhouse renovation, the key is proving business intent vs. personal use. Since you plan to sell it, keep detailed records showing this was always the business plan - purchase documents, renovation budget focused on profit maximization, maybe even get a before/after appraisal to show the business value you're adding. Regarding your fiancé's rental property - the beauty of the election to treat all rental activities as one is that you don't need to materially participate in EACH property individually. Your combined hours across all real estate activities (including your renovation work) can satisfy the material participation test for the entire portfolio. Just make sure you're tracking everything contemporaneously - date, time, specific activity. I learned that lesson the hard way! Also consider whether you might qualify under the "more than half your working time" test since you're a SAHM - that could actually work in your favor here.

I've been following this thread and wanted to add some practical insights from my experience as a tax professional who frequently deals with real estate professional status claims. One critical point that hasn't been fully addressed is the timing of your marriage and how it affects your qualification. Since you're marrying in April, you'll need to be extra careful about how you structure your activities for the rest of the year. The IRS will look at your combined filing status, but they'll also scrutinize whether your real estate activities were truly "businesses" versus personal projects that became businesses after marriage for tax purposes. For your farmhouse renovation to count, you'll need to establish that it was a business from day one - not just something that became a business when you realized the tax benefits. Document everything: your business plan, market research showing why you chose this property, renovation budget focused on maximizing resale value, and keep detailed contemporaneous time logs. Regarding the 200+ unit rental property - the election to treat all rental activities as one is powerful, but be prepared for IRS scrutiny when combining a hands-off managed property with hands-on renovation work. You'll need to show some level of involvement in the rental business beyond just making the election. This could be reviewing management reports, making strategic decisions about the property, or participating in major decisions even if day-to-day management is delegated. The key is creating a clear paper trail that shows legitimate business activity, not just tax avoidance. Make sure every hour you claim is defensible and directly related to your real estate businesses.