Will the Final Regulations Under Section 469(C)(7) Renew Taxpayer Interest in Real Estate?

Real Estate Law Journal, Vol. 25, No. 2, Spring 1996

12 Pages Posted: 2 Jun 2008

See all articles by Francine J. Lipman

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

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 and explores these issues.

Keywords: passive loss rules, tax shelter, rental real estate, real estate professionals, real property trades or businesses

JEL Classification: H24, H25, H26, K34

Suggested Citation

Lipman, Francine J. and Williamson, James E., Will the Final Regulations Under Section 469(C)(7) Renew Taxpayer Interest in Real Estate?. Available at SSRN: https://ssrn.com/abstract=1138817

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

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