Discussion:Real Estate Professional material participation audit
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| Revision as of 13:37, 16 September 2009 Kevinh5 (Talk | contribs) (ah, the proverbi) ← Previous diff |
Revision as of 17:02, 16 September 2009 TexCPA (Talk | contribs) (look here [[http) Next diff → |
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| Solomon's answer gives you the info you need. What did you learn from reading that document?}} | Solomon's answer gives you the info you need. What did you learn from reading that document?}} | ||
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| + | {{ForumReplyPost|UserID=TexCPA|Date=16 September 2009|Text=look here | ||
| + | [[http://www.irs.gov/pub/irs-mssp/pal.pdf ATG PAL]] | ||
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| + | [[User:TexCPA|TexCPA]] 12:02, 16 September 2009 (CDT) }} | ||
Revision as of 17:02, 16 September 2009
Discussion Forum Index --> Consumer Questions --> Real Estate Professional material participation audit
| 16 September 2009 | |
| IRS Audit question
I have a client that is a real estate agent with a rental property trying to claim rental expenses during an IRS audit. The examiner is trying to deny the expenses and reduced the rental loss down to passive losses. I am aware that real estate professional losses are not limited if you meet all requirements. She is trying to deny the cost based on the 500 hour material participation rule. She claims because I can not prove he worked on the rental for over 500 hours the deduction is denied. I prepared the return using turbo tax and answered all questions accordingly. I have also researched the material participation definition which is very gray. 1. He spent more than 750 hours a year actively involved in real estate, he had over 2500 hours, and have been assisting people with selling, leasing and buying real estate for over 5 fives years. 2. He has spend more than 50% of my work related time involved in real estate. 3. Next screen, I clicked on the material participation tab and read the description. based on the questions,He can qualify for number 6 material participating in a personal service for the last three years under a real estate and consultant label. He can also meet number 2, He is the only person who substantially participates in the activity. By Turbo Tax calculations, He should only have to meet 1 of these requirements to be a real estate professional. The auditor is trying to deny all of the rental loss based only on meeting the 500 hours of participated activity. Can anyone tell me, why the auditor is taking this position and if turbo tax definition of material participated is correct and what can I say to prove the auditor wrong. | |
| 16 September 2009 | |
| Why are you doing tax returns in TurboTax if you are a tax pro? second, you will need a logbook showing your hours. | |
| 16 September 2009 | |
| Read this as well:
[[1]] esp. this part: You are not licensed or permitted to use the Software, or allow the Software to be used, to prepare tax returns, schedules or worksheets on a professional or commercial basis (i.e., for a preparer's or other fee). Additionally, you must indemnify and defend Intuit against any claims or lawsuits, including (without limitation) attorneys’ fees, that arise from or result from the use of the Software on a professional or commercial basis. curious, did you sign the return for the client, or are you in the category of 'professional' that is above that? TexCPA 20:37, 15 September 2009 (CDT) | |
| 16 September 2009 | |
| Noted, however can anybody address the issue about material participation | |
| 16 September 2009 | |
| ah, the proverbial "I have a 'client' ".
Solomon's answer gives you the info you need. What did you learn from reading that document? | |
