Blog Archives

Defining Passive Activity Between Spouses – Beyond the Bedroom: What Is Material Participation?

One would imagine this is the script to a low budget B-rated film by the title, it is not. But if it got you reading all the better because you may want to know about my friends, a professionally successful

Tagged with: , , , , ,
Posted in Material Participation, Passive Activity, Rental Real Estate, Sub-chapter S, Tax Guidance & Preparation, Tax Preparer

Passive Activities and the Real Estate Professional – IRC 469(c)(7) and Reg. 1.469-9

A qualifying real estate professional may deduct rental real estate losses for each rental in which he/she materially participates provided 3 tests are passed: More than one half of the taxpayer’s personal services must be in real property business.  ‘Real

Tagged with: , ,
Posted in Passive Activity, Rental Real Estate

Common Mistakes with Passive Activities – IRC 469 – IRS Form 8582

Not grouping related activities as one activity Treating equipment leasing as non-passive by placing the revenue from such on Schedule ‘C’ or Schedule K-1 line 3.  Rentals are passive even if the taxpayer materially participated Deduct rental real estate losses

Tagged with: , ,
Posted in Passive Activity

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

Tagged with: , ,
Posted in Passive Activity, Rental Real Estate

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,

Tagged with: ,
Posted in Passive Activity, Rental Real Estate

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

Tagged with: , ,
Posted in Passive Activity, Rental Real Estate

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

Tagged with: ,
Posted in Passive Activity, Rental Real Estate

New reporting rules for passive activities force group decisions

As part of the IRS's continuing efforts to require greater disclosure of tax positions and strategies on returns, it recently released new, mandatory disclosure rules for grouping passive activities. Rev. Proc. 2010-13 for the first time mandates that passive-activity groupings

Tagged with: , ,
Posted in Cost Segregation, Depreciation, Like/Kind Exchange, Mortgage, Net Operating Loss, NOL, Passive Activity, Rental Real Estate, Tax Deductible Expenses, Tax Guidance & Preparation, Tax Problems & Requests, Taxable Income
Subscribe via Email

Follow me on Twitter
QuickBooks Advanced Certified ProAdvisors Online

QuickBooks Certified ProAdvisor - QuickBooks Online Advanced Certification

Xero Certified Adviser