Blog Archives

What is a Real Estate Professional For US Federal Income Tax Purposes

Everyday people misinterpret the tax code.  It does not matter if you are a bookkeeper, accountant, unlicensed tax practitioner, Enrolled Agent, CPA, tax attorney, or even a Tax Court Judge, the tax code is complicated and confusing and many of

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Posted in Material Participation, Passive Activity, Real Estate Professional

LLC Income is INDEED Subject to Self Employment Tax: IRS Chief Counsel Advice 201436049

In 1997, the IRS issued proposed regulations governing when the distributive share of partnership income for Limited Liability Company (LLC) members was to be included in self-employment income. It basically advised that an LLC member would be treated as a

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Posted in Employment Tax, Entity Classification, Limited Partnership, LLC, Material Participation, Passive Activity, Payroll Tax Problems, Small Business, Social Security Tax, Taxable Income, Uncategorized

Schumann v. IRS: Reg. 1.469-2(f)(6) – The Nuanced Relationship Between Passive Losses & Self Rental Gains

Back to my friends that I previously wrote about who misunderstood passive activity and material participation. They are a married couple filing jointly and own a very successful business together structured as an S-corporation as well as a portfolio of rental

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Posted in 1031 Exchange, Appeals & Audit Resolution, Business Expense, Business Income, Deductible Expense, Disallowed Expenses, IRS Examination, Material Participation, Passive Activity, Rental Real Estate, Self Rental, Sub-chapter S, Tax Court, Tax Guidance & Preparation

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

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