Common Mistakes with Passive Activities – IRC 469 - IRS Form 8582 - John R. Dundon II, Enrolled Agent
8069
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Common Mistakes with Passive Activities – IRC 469 – IRS Form 8582

The Perturbing New Treatment of Patents Under the Tax Cut & Jobs Act (TCJA)

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

  1. Not grouping related activities as one activity
  2. 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
  3. Deduct rental real estate losses when AGI is more than $150,000.  The $25,000 Passive Activity Loss Limitation offset is phased out when modified adjusted gross income exceeds $150,000
  4. Real estate professional has 10+ rentals listed all as non-passive.
  5. Schedule ‘E’ net income is reported on Form 8582 as property leased to taxpayer’s corporation or partnership.  Self rented property income is not passive
  6. Reg 1.469-4(d) prohibits grouping a rental activity and a business unless each activity is owned in identical percentage and property is leased to the business.  A rental can never be grouped with a ‘C’ corp.


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