Tax Court Rules on Qualifying as Real Estate Professional
Apr 02,2014
April 2, 2014: Tax Court: trust can qualify for real estate professional - Frank Aragona Trust, (2014) 142 TC No. 9 The Tax Court has determined that a trust that owned real estate properties and engaged in other real estate activities qualified for the Code Sec. 469(c)(7) exception for real estate professionals and thus wasn't subject to the passive activity loss (PAL) limitations. In so concluding, the Court found that services performed on behalf of a trust may be considered personal services performed by the trust. Background. Under Code Sec. 469(c)(1), a taxpayer's passive-activity loss (i.e., the amount by which the aggregate losses from all the taxpayer's passive activities for the year exceeds the aggregate income from all the taxpayer's passive activities for such year) is disallowed for the year if the taxpayer is “described in” Code Sec. 469(a)(2). Among the taxpayers “described in” that section are individuals, estates, trusts,...

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