What happens with suspended prior year losses when a now non-passive activity generates net income?

If the current year non-passive activity triggers deductibility of prior year suspended passive activity losses, IRC 469(f) permits a prior year passive loss to offset current year income from the same activity, even though that income might be non-passive in

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Grouping Passive Activities – IRS Rev Proc 2010-13

This new IRS Revenue Procedure is hugely important. Beginning in tax years after 1/24/2010 the IRS is requiring a written statement to accompany the tax return that lists how passive investment activities are grouped. The statement must include your name,

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Tests for Material Participation IRC 469(h) Reg. 1.469-5T

Material participation is regular, consistent and substantial personal involvement in operations. It is required in businesses, farms, rental real estate owned by real estate professionals, most vacation rentals, hotels, motels, and B&B’s, etc.. Basically most anything reported on IRS form

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Passive Activity – New in 2010 – An Overview of Internal Revenue Code 469

According to Revenue Procedure 2010-13 starting in 2010: A written statement is required to group similar business/activities. Managing LLC members must pass any of 7 tests for material participation the most popular of which is the 500 hours per year

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Stop messing around, take it to IRS Appeals

My mantra lately is becoming .... 'take it to appeals. Stop messing around.' The Appeals function offers an additional forum for taxpayers to resolve conflicts and mediate disputes with all operating divisions inside the IRS. The IRS Appeals function should

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Partial Payment IRS Installment Agreement PPIA

The PPIA is an installment agreement that pays back less than what is owed to the IRS because of the expiration of the statue of limitations for collection. It is requested by filing out  IRS form 433. The PPIA was

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When to File Collection Appeal Request (CAP) IRS form 9423

A Collection Appeal Request (CAP) -  IRS Form 9423 - is filed in response to the IRS enforcing collection against an accrued amount they believe they are owed by you or the denial or termination of an installment agreement. Except in

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When to file a request for a Collection Due Process or Equivalent Hearing (CDP) IRS form 12153

The IRS Restructuring and Reform Act of 1998 established the Collection Due Process or Equivalent Hearing (CDP), which is an appeal filed in response to the following collection actions: Notice of Federal Tax Lien Filing and Your Right to a

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Posted in Appeals & Audit Resolution, Back Taxes Owed, IRS Appeal, IRS Audit, IRS Collections, IRS Enforcement, IRS Examination, IRS Levy, IRS Lien, IRS Mediation, IRS Penalties, IRS Penalty and Interest Abatement

Top Passive Loss Issues for the IRS

The following are the top issues for the IRS regarding passive losses: Airplane Leasing Farm loss - particularly when the taxpayer lives out of state Rental Real Estate Real Estate Professionals demonstrating 'material participation' Equipment leasing losses 1120S and 1065

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Examples of Income that is NOT Passive

Rental Income from a building leased to a business where the tax payer works - Reg 1.469-2(f)(6) Rental income from leased land - Reg. 1.469-2T(f)(3) Income from land, a building or other property held for investment IRC 469(e)(1)(A)(ii)(II) Gains on

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