Passive Loss Rules and Real Estate Professionals
Author: Annette Nellen
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
This course explains the special rule that allows certain individuals to apply the material participation rules to real estate rental activities to avoid their classification as passive activities.
Publication Date: February 2025
Designed For
Practitioners with clients who own rental real estate. Practitioners who advise clients on the passive activity loss rules.
Topics Covered
- Quick §469 review
- Relevance and rationale of §469(c)(7)
- Key rules and terminology
- Grouping of rental real estate
- IRS Audit Techniques Guide Sampling of court cases
- How §469(c)(7) interacts with other aspects of the passive activity rules and related rules, Including Sections 199A, 469 and 1411
- Recordkeeping considerations
- Tips for avoiding problems
Learning Objectives
- Identify how the §469(c)(7) "real estate professional" rule works
- Describe the rationale behind this special rule
- Identify the real estate rental grouping options and how to make a grouping election
- Recognize how to gain an appreciation of how to avoid problems in applying the special rule
- Identify how many tests a taxpayer must satisfy for the tax year in order to be considered as materially participating in an activity
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
