Real Estate Invesment - Passive or Active?

[jlcl]

What is the name of your state (only U.S. law)? California

As we have schedule C income and rental real estate losses, if my husband and I are filing a joint return, for the 750 hours material participation rule, is it based on total hours my husband AND I spent in the real estate activites, or is it based on hours one person spent.

We want to see if we can qualify the losses as non-passive losses.

 

[FlyingRon]

You can add the times together (and federally, it's only 500 hours).

However, you need to determine if the activities you are considering can be legitimately considered a single activity. If it's multiple activities, those can not be added together to make the limit as rentals are excluded specifically. Whether or not they can be grouped together into a single activity depends on the nature of the activities (and you've not provided enough information to tell).

I'd recommend taking all the details to a tax advisor before making the leap that you can use non-passive treatment for this. Rentals are HIGHLY scrutinized in the passive/non-passive examination.