Get a Better Understanding of the Passive Activity & Real Estate Professional Rules
Operating losses generated from rental properties are generally passive losses, which may provide only limited benefit to the taxpayers unless they are able to qualify as a "real estate professional". Unfortunately, identifying someone as a real estate professional can be a challenging and confusing task for practitioners and the IRS.
This session by expert speaker Haleh Naimi will provide a discussion on the tax issues generally faced by clients who invest in rental real estate, along with details of the passive activity rules as well as the real estate professional rules.
You will learn the importance of qualifying as a real estate professional, including satisfying the statutory and regulatory requirements that must be met. The information presented during this session will be expressive and substantiated with facts/figures or quality inputs.
Learn to navigate the real estate professional rules
Apply real estate professional rules to client situations
Identify tax savings opportunities for clients who own, rent or sell real estate
Learn which activities are subject to the passive activity loss (PAL) rules
What the exceptions to the PAL rules are
Which exceptions apply to real estate professionals
How IRC Section 469 defines passive activity, rental and trade or business
What it means to “materially participate in an activity”
What the exceptions to “rental activity” are
How to calculate passive activity income and losses
What the tax consequences of passive activity dispositions may be
Which passive activity investments are covered by IRC Section 1411’s 3.8% net investment income tax
Understanding passive loss limitations
Understanding the real estate professional exception to the passive activity rules
Identifying the steps necessary to qualify as a real estate professional
Understanding the additional safe harbor required to keep rental income of a real estate professional out of Net Investment Income (NII) of Section 1411
Passive activity loss rules, which are applicable to rental real estate activities and investments in S corps and partnerships
Activity, activity grouping and disclosure rules definitions
Real estate professional exception to passive activity loss rules regarding non-passive rental investments
Loss allowance of $25,000, for rental real estate with active participation
Events triggered by suspended passive activity losses
Tax credits limitations, which are generated through passive activities
Rules re-characterizing passive income into non-passive income
Haleh Naimi is a tax and bankruptcy attorney representing individuals and businesses (ranging in size from small to middle-market) in complex tax, bankruptcy and commercial litigation matters throughout California and New York. She has lectured on tax controversy issues involving collection and bank...