Discussion:Rental Property - Passive
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| {{ForumReplyPost|UserID=WPCPA|Date=7 April 2008|Text=Its my understanding the Hour Requirement (very strict) is 750 hours annually, a Tax Case on this is recent, there a Teacher (full time) had rental properties - the Tax Court opined that it was "impossible" for her (the Taxpayer) to meet the requirmeent given her full time employment - and she did not have itemized hours to substantiate the 750-test.}} | {{ForumReplyPost|UserID=WPCPA|Date=7 April 2008|Text=Its my understanding the Hour Requirement (very strict) is 750 hours annually, a Tax Case on this is recent, there a Teacher (full time) had rental properties - the Tax Court opined that it was "impossible" for her (the Taxpayer) to meet the requirmeent given her full time employment - and she did not have itemized hours to substantiate the 750-test.}} | ||
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| + | {{ForumReplyPost|UserID=Taxwizard|Date=7 April 2008|Text=Chicago, there is no hours requirement for the "active participation" standard. Every associate is entitled to one mistake.}} | ||
Revision as of 20:17, 7 April 2008
Discussion Forum Index --> Advanced Tax Questions --> Rental Property - Passive
Discussion Forum Index --> Tax Questions --> Rental Property - Passive
Chicagocpa1 (talk|edits) said: | 4 April 2008 |
| Hello - Is there any situation when a rental property should be classified as a passive activity and not rental real estate with active participation? I have MFJ return. Both spouses work fulltime and have 5-6 rental properties on the side. Assuming they are making management decisions, is there a situation when these should be classified as passive? If they weren't rental real estate activities, it would certainly be passive activity, as they would not meet hour requirements. Thanks. | |
| 4 April 2008 | |
| Is a CRP (or any kind of gubment boondoggle) available for timber land? I got a 76 year old who is land poor. She's related to me, I won't say how. Ugh, I have no idea what I just did... | |
| 4 April 2008 | |
| Crow, this is the wrong discussion for that - look for that post on Methuselah | |
| 5 April 2008 | |
| ChicagoCpa - Are the Rental Propterties producing significant Net Income? | |
Chicagocpa1 (talk|edits) said: | 6 April 2008 |
| Yes, the properties have carry-foward losses for years. I want to take the losses this year on the properties that were sold to reduce gain and, potentially, carry-foward losses on properties that were not sold. An associate insists that they need to be reported on 8582- passive - all other activities as client works fulltime job elsewhere. He was activily participating in managmement of the buildings, so I don't understand why it would not be rental activity with active participation. | |
| 6 April 2008 | |
| passive audit guide I suggest you review the audit guide on passive losses to make sure. I assume these are apartment properties? | |
| 6 April 2008 | |
| Chicago CPA - all rentals that don't rise to the level of a trade or business are passive activities. That's why I suggested you read 469. You might need to brush up and take some good CPE on rentals and passive. | |
Chicagocpa1 (talk|edits) said: | 6 April 2008 |
| Thanks all! I have read 469 inside and out and the audit guide (though no CPE, as of yet). I understand that rentals are all passive and they are definitely not trade or business in this case. However, an associate (whose opinion I respect) states that since hours requirement is not met, client hasn't met active participation in real estate. He too suggested I read 469. :-). I guess in these last few days, I am really missing something, because I can't find anything that states an hours requirement for active participation. Thanks again! | |
| 7 April 2008 | |
| Its my understanding the Hour Requirement (very strict) is 750 hours annually, a Tax Case on this is recent, there a Teacher (full time) had rental properties - the Tax Court opined that it was "impossible" for her (the Taxpayer) to meet the requirmeent given her full time employment - and she did not have itemized hours to substantiate the 750-test. | |
| 7 April 2008 | |
| Chicago, there is no hours requirement for the "active participation" standard. Every associate is entitled to one mistake. | |
