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Will Changes To The Passive Income Rules Renew Interest In Real Estate?, Francine J. Lipman, James E. Williamson
Will Changes To The Passive Income Rules Renew Interest In Real Estate?, Francine J. Lipman, James E. Williamson
Francine J. Lipman
The final regulations under IRC Sec. 469(c)(7) provide guidance on the rental real estate activities of taxpayers engaged in real property trades or business as defined by the Omnibus Budget Reconciliation Bill of 1993. The final regulations do not provide an explicit definition of the phrase "trade or business," but rather state that a taxpayer's real property trades or businesses can be identified using any reasonable method. Because of such ambiguity, rental real estate may become an attractive tax shelter for some investors. The lack of a specific definition of a trade of business may give an opportunity for those …
Will The Final Regulations Under Section 469(C)(7) Renew Taxpayer Interest In Real Estate?, Francine J. Lipman
Will The Final Regulations Under Section 469(C)(7) Renew Taxpayer Interest In Real Estate?, Francine J. Lipman
Francine J. Lipman
Since the 1986 enactment of IRC § 469, which places significant restrictions on how deductions, losses, and credits from a passive activity can be used to offset income from another activity, rental real estate ventures have lost much of their appeal to taxpayers seeking ways to shelter their active and portfolio incomes. However, the 1993 enactment of IRC § 467(c)(7), along with the related final regulations, may allow certain taxpayers, in addition to the real estate professionals specifically targeted by Congress for this relief, to once again offset rental real estate losses against their other taxable income. This article explains …