I need to put in 750 hours to write off losses from my real estate property for last year. On an average day, I leave my house to take care of another business in a different part of the city. After I do that, I travel to my rental property about an hour away, and stay there about 45 minutes, to take care of it, sweep and perform various chores. Then, I travel back to my other business to take care of that again. Is the travel time to the rental property and back considered part of a non-passive activity?

ANSWER

The BIDaWIZ Team's Answer:

We don't believe that you satisfy either requirement detailed in IRC Section 469(c)(7)((B). Also, travel time is not included in the hourly tests for material participation as per the case of Thomas E. Truskowsky, T.C. Summary Opinion 2003-130. Specifically, you must 1) spend more than one-half of the personal services performed in trades or businesses by the taxpayer during such taxable year in real property trades or businesses AND 2) perform more than 750 hours of services during the taxable year in real property trades or businesses in which the taxpayer materially participates.