In certain situations, a taxpayer may be able to claim capital gain treatment, even if the taxpayer subdivides the real property into lots and actively tries to sell the parcels.
Shared-equity financing arrangements can help individuals acquire homes they might not otherwise be able to afford, but care should be taken with the tax planning aspects.
The IRS and taxpayers have struggled with what constitutes a real property trade or business.
This article lays out the steps for determining whether a taxpayer qualifies as a real estate professional.
This item discusses a tenancy in common and what this type of ownership entails.
The IRS ruled on two situations involving individual taxpayers who had debt forgiven on property used in their real property trades or businesses.
Provisions of the Protecting Americans From Tax Hikes Act of 2015 changed the tax treatment of dispositions of investments in real property by foreign taxpayers.
Properly planning for a real estate transaction is imperative to lowering tax expenses and increasing returns for investors.
A recent Tax Court decision sheds light on the importance of lease terms to determine what is rent and how Sec. 467 may apply to advance rents.
Recent court decisions are reminders that land may not always be a capital asset that gives rise to a capital gain when sold. Land may also be held for sale to customers in the ordinary course of business, in which case gain on the sale of the land will be ordinary income.
IRS Provides Guidance on Interplay of Rental Real Estate Grouping Election and Real Estate Professional Exception
The IRS Office of Chief Counsel advised on the interaction of the rental real estate grouping election and the real estate professional exception to passive activity loss rules.
The interaction of Secs. 469 and 1411 present special challenges for real estate professionals and their advisers.
Qualifying as real estate professionals allows taxpayers to avoid having their rental real estate activities treated as per se passive. This article discusses the requirements for qualifying as a real estate professional and how the requirements have been interpreted by the IRS and the courts.
The Tax Court held that a married taxpayer who filed a separate return did not qualify as a real estate professional through attribution of her husband's activities, and therefore she could not deduct her rental real estate losses.
Determining whether a real estate sale produces ordinary income or capital gain is difficult and is potentially an issue that can cause a taxpayer to be liable for significantly higher taxes.
This item addresses a situation that often arises in today’s economic climate: a short sale of real property held for investment, not for rental, secured by a recourse note.
This item reviews recent IRS guidance on how certain taxpayers can make a late election to treat all interests in rental real estate as a single rental real estate activity.
This item reviews fundamental relationships of the grouping of activities under Regs. Sec. 1.469-4 and the grouping of rental real estate activities under Regs. Sec. 1.469-9.
The recent Gates decision forces practitioners to reexamine the types of questions they ask a client during tax planning or their annual tax interview if the client has sold his or her personal residence.
Editor: Kevin F. Reilly, J.D., CPA One of the first decisions taxpayers must make when planning their estates is what to do with the principal home. With the changing and sometimes downtrodden real estate market, this can be a difficult and time-consuming task for heirs, particularly if they do not