Will Changes to the Passive Income Rules Renew Interest in Real Estate?

Journal of Property Management, Vol. 61, No. 78, May 1996

2 Pages Posted: 16 Jun 2008  

Francine J. Lipman

University of Nevada, Las Vegas - William S. Boyd School of Law

James E. Williamson

San Diego State University - College of Business Administration

Abstract

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 in fringe real estate businesses to become real estate operators. Some taxpayers may also be able to characterize their real estate rental losses as non-passive.

Keywords: rental real estate, tax shelter, real estate professionals

JEL Classification: H20, H25, H26, H24, K34

Suggested Citation

Lipman, Francine J. and Williamson, James E., Will Changes to the Passive Income Rules Renew Interest in Real Estate?. Journal of Property Management, Vol. 61, No. 78, May 1996. Available at SSRN: https://ssrn.com/abstract=1138445

Francine J. Lipman (Contact Author)

University of Nevada, Las Vegas - William S. Boyd School of Law ( email )

4505 South Maryland Parkway
Box 451003
Las Vegas, NV 89154
United States

James E. Williamson

San Diego State University - College of Business Administration ( email )

School of Accountancy
San Diego, CA 92182-8230
United States
619-594-6021 (Phone)

HOME PAGE: http://www.sdsu.edu

Paper statistics

Downloads
107
Rank
208,605
Abstract Views
621