If a person owns rental properties, there’s a good chance at least one of them will generate a loss during ownership. But the passive activity loss (PAL) rules can make it difficult to deduct those losses. If rental real estate is a significant activity, it pays to review the situation to determine whether one meets the IRS’s definition of “real estate professional.” This article explains some of the circumstances in which one may qualify and how it might be possible to convert passive losses into non-passive losses, creating substantial tax benefits.