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
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
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