A qualifying real estate professional may deduct rental real estate losses for each rental in which he/she materially participates provided 3 tests are passed: More than one half of the taxpayer’s personal services must be in real property ...
Not grouping related activities as one activity 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 Deduct rental real estate losses when AGI is more...
There are two distinct issues to evaluate when disposing of a passive asset: Is the disposition considered to be a qualifying disposition under reg 1.469 making the losses deductible? Is the gain...
According to Marilyn E. Brookens, an attorney in the IRS Office of Associate Chief Counsel (Income Tax and Accounting), “Effective for the 2010 tax year, the adoption tax credit is a FULLY REFUNDABLE TAX CREDIT. The credit was made refundable by Section 10909 of the...
Debt that is forgiven is considered income for taxes purposes and is reportable to the IRS. The debt forgiven is reported by the lender to the IRS on form 1099-C. The debt forgiven is reported by the taxpayer as other income on Form 1040, Line...
The IRS has issued two new forms for reporting stock options. Form 3921, Exercise of an Incentive Stock Option Under Section 422(b), and Form 3922, Transfer of Stock Acquired Through An Employee Stock Purchase Plan Under Section 423(c), reflect the information reporting required by the...
Like seemingly everything in the US Tax Code, it depends....
This new IRS Revenue Procedure is hugely important. Beginning in tax years after 1/24/2010 the IRS is requiring a written statement to accompany the tax return that lists how passive investment activities are grouped. The statement must include your name, address, employer ID #, and/or...
Material participation is regular, consistent and substantial personal involvement in operations. It is required in businesses, farms, rental real estate owned by real estate professionals, most vacation rentals, hotels, motels, and B&B’s, etc.. Basically most anything reported on IRS form K-1 Line 1 for partnership...
According to Revenue Procedure 2010-13 starting in 2010: A written statement is required to group similar business/activities. Managing LLC members must pass any of 7 tests for material participation the most popular of which is the...