The complexity of Section 469 passive loss limitation rules presents a formidable challenge for both taxpayers and CPAs. This course tackles the intricate nuances of these rules, which often perplex practitioners with their myriad of deductions, disallowances, and suspensions. This self study CPE course explores the problem by underscoring the need for expert guidance in navigating these convoluted provisions. The solution is provided through an in-depth exploration of Section 469, equipping participants with essential skills to address practical issues. The course focuses on reviewing fundamentals, identifying planning opportunities, and exploring both creative and traditional tax-saving strategies. This results in a comprehensive understanding and efficient handling of client issues related to Section 469, with a strong emphasis on maximizing tax savings.
Learning Objectives
Upon successful completion of this course, participants will be able to:
Identify affected taxpayers, categories of income and loss and passive losses under Section 469 and necessary Section 469 calculation steps and specify the Section 469 & Section 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 Section 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 Section 469.
Major Topics
Passive Loss and At-Risk Rules
Material Participation
Passive and Non-passive Activities
Carryover of Disallowed Losses
