Real Estate Agent Didn’t Materially Participate in Rental Activity
Apr 02,2014
Wednesday, April 2, 2014 from Bloomberg Daily Tax ReportTax Decisions & Rulings - Real EstateFederal Court: Real Estate Agent Didn't Materially Participate in Rental ActivityThe U.S. District Court for the Northern District of California held that a real estate agent's losses from rental properties were subject to passive loss limitations, because the real estate agent couldn't prove that she materially participated in each rental real estate activity (Gragg v. United States, N.D. Cal., 4:12-cv-03813, 3/31/14).Judge Yvonne Gonzalez Rogers, in granting summary judgment to the government and denying the taxpayers' cross-motion for summary judgment on March 31, said Section 469(c)(7) and its related regulations didn't excuse real estate professionals “from the obligation of showing material participation in each real estate activity before deducting otherwise passive losses from that activity.” The Internal Revenue Service disallowed losses in excess of the passive loss limitation claimed by Charlesand Delores Gragg on their 2006 and...

Go back to Blog Home