Real Estate Professional
This check is for an individual. A closely held C corporation uses a gross-receipts test instead. Nothing you answer is saved.
A full-time W-2 job is an early warning, not a hard stop. Either answer continues the check.
Hours you work as an employee count as personal services in a trade or business. They count toward the more-than-half test. They count as real property hours only if you own more than 5 percent of the employer.
IRC section 469(c)(7)(A), (B), (C), and (D). Treasury Regulation section 1.469-9(b)(4), (c)(1), (c)(3), (c)(4), (c)(5), (e), (f), and (g). Treasury Regulation section 1.469-5T(a), (b)(2), (c), (d), (e), (f)(2), (f)(3), and (f)(4). Treasury Regulation section 1.469-5 reserves (f)(2) through (h)(2). The spouse rule in force is Treasury Regulation section 1.469-5T(f)(3). Treasury Regulation section 1.469-1T(e)(3) (when an activity is a rental activity, including the 7-day rule). IRS Publication 925 (2025), Real Estate Professional and Material Participation. Section 1.469-9(b)(4) defines personal services. The employee-hour rule, including the more-than-5-percent owner test, is IRC section 469(c)(7)(D)(ii) and Treasury Regulation section 1.469-9(c)(5).
