Proposed regulations address relief for real estate professionals under the passive loss rules

Article Abstract:

IRC section 469(c)(7) was enacted in 1993 to provide full-time real estate developers with relief from the passive loss rules that had not allowed developers to offset income and losses. The proposed regulations under section 469(c)(7) identify who qualifies for the relief, how rental activity should be treated and what the impact of other regulations is. To qualify for relief, the real estate professional's activities must meet the material participation, 750 hours and 50% tests.

Real estate agents, Real estate agents and brokers

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IRS issues final regulations on passive loss relief for real estate professionals

Article Abstract:

Final IRS regulations released under IRC section 469(c)(7) clarify some provisions of the exception to the passive loss rules that section 469(c)(7) provides for real estate professionals. The passive loss rules require that passive activity losses can generally be used only to offset passive income. The regulations do not allow taxpayers to apply the aggregation rule to combine nonrental and rental activities to demonstrate material participation.

Real estate investment, Real estate investments

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"Thumbs up" for the proposed activity regulations

Article Abstract:

The IRS' new proposed regulations concerning passive activity will replace the confusing, building-block approach of the May 1989 regulations for IRC section 469 rules. The new passive loss rules are simple enough for tax practitioners and taxpayers to understand and apply while maintaining the intent of section 469 and preventing taxpayer abuse.

United States. Internal Revenue Service

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