Passive Loss and At-Risk Rules
Field of Study:
With the adoption of the passive loss limitation rules, taxpayers are looking to CPAs for guidance related to what deductions are allowed, disallowed, or suspended. Updating practitioners on the practical aspects of §469, this course addresses the needed skill to handle these pragmatic issues. Fundamentals are reviewed, planning opportunities are identified, and creative strategies are discussed and evaluated along with remaining traditional approaches. The goal of this instructive course is to understand and solve client problems under §469, with emphasis on tax savings ideas. Participants will learn to master the proper administration of these complex and often cumbersome provisions.
After completing this course, you should be able to:
- Identify affected taxpayers, categories of income and loss and passive losses under §469 and necessary §469 calculation steps and specify the §469 & §1211 limits and the ordering and suspension of any disallowed losses.
- Recognize a taxpayer’s material participation in an activity by:
- Identifying the material participation tests and their application to entities such as partnerships and corporations;
- Specifying the activity grouping rules noting exempt activities;
- Determining passive activity particularly, the treatment of rental activity as passive; and
- Identifying “nested” activities.
- Identify special passive loss rules and calculations by:
- Determining alternating use affects on amount realized and adjusted basis and citing additional loss limitations outside of §469;
- Recognizing requirements for the special $25,000 allowance; and
- Specifying recharacterization rules and their purpose.
- Recognize the passive activity audit guidelines identifying audit issues, determine the real estate rental activity credit exception, and cite the at-risk limit rules as they relate to §469.
Recommended CPE credits:
General understanding of federal income taxation.
Type of delivery method:
Final examination expiration date:
The program participant will have one year from the date of purchase to complete the course and final examination.
Web CPE is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org