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Nov 06 2012
Passive Activity Losses

Posted in tax

Rental Property - Loss Recognition

Under IRC Sec. 469(c)(7)(B), real estate professionals may treat otherwise passive rental real estate activities as nonpassive if (1) more than 50% of personal services during the tax year are performed in real property trades or businesses in which the taxpayer materially participates, and (2) the taxpayer spends more than 750 hours of service during the tax year in real property trades or businesses in which they materially participate. In an emailed Chief Counsel Advice, the IRS stated that a trust cannot meet these qualifying tests because they are intended to apply only to individuals. Only individuals are capable of performing personal services and the statute states that the personal services must be performed by the taxpayer.

Where a taxpayer may have multiple properties, it is critical that an election be made to have the properties grouped for tax purposes - or else the above criteria applies to EACH activity.

To discuss this or other tax topics please call 781-438-6655.

For additional information regarding Thomas W. Bates & Associates, CPAs and the services we provide, please visit www.twbatescpa.com.

Last Updated by Mike on 2012-11-06 07:02:35 AM

Thank you for visiting our blog.  While we work hard to keep our content informative and accurate, should you come across an apparent error or misstatement we would appreciate your feedback so we are able to correct the post.  Please be aware that certain information contained in a post may be time sensitive, and as often is the case, can become outdated.

The content of our blog often represents our professional opinion, but it may not apply to your specific set of circumstances, please contact your tax professional for more information.  What you find on this blog should not be taken as counsel and nor should it be considered as fact or absolute.

Comments on this website are the sole responsibility of their writers and the writer will take full responsibility, liability, and blame from any libel or litigation that results from something written in or as a direct result of something written in a comment.

Thank you for visiting our blog.  While we work hard to keep our content informative and accurate, should you come across an apparent error or misstatement we would appreciate your feedback so we are able to correct the post.  Please be aware that certain information contained in a post may be time sensitive, and as often is the case, can become outdated.

The content of our blog often represents our professional opinion, but it may not apply to your specific set of circumstances, please contact your tax professional for more information.  What you find on this blog should not be taken as counsel and nor should it be considered as fact or absolute.

Comments on this website are the sole responsibility of their writers and the writer will take full responsibility, liability, and blame from any libel or litigation that results from something written in or as a direct result of something written in a comment.

Thank you for visiting our blog.  While we work hard to keep our content informative and accurate, should you come across an apparent error or misstatement we would appreciate your feedback so we are able to correct the post.  Please be aware that certain information contained in a post may be time sensitive, and as often is the case, can become outdated.

The content of our blog often represents our professional opinion, but it may not apply to your specific set of circumstances, please contact your tax professional for more information.  What you find on this blog should not be taken as counsel and nor should it be considered as fact or absolute.

Comments on this website are the sole responsibility of their writers and the writer will take full responsibility, liability, and blame from any libel or litigation that results from something written in or as a direct result of something written in a comment.