Chapter 10
Loss Restrictions: Passive Activities and At-Risk Limits
10.2 Rental Real Estate Loss Allowance of up to $25,000
10.3 Real Estate Professionals
10.4 Participation May Avoid Passive Loss Restrictions
10.5 Classifying Business Activities as One or Several
10.6 Material Participation Tests for Business
10.7 Tax Credits of Passive Activities Limited
10.8 Determining Passive or Nonpassive Income and Loss
10.9 Passive Income Recharacterized as Nonpassive Income
10.10 Working Interests in Oil and Gas Wells
10.11 Partners and Members of LLCs and LLPs
10.13 Suspended Losses Allowed on Disposition of Your Interest
10.15 Personal Service and Closely Held Corporations
10.16 Sales of Property and of Passive Activity Interests
10.20 At-Risk Investment in Several Activities
The passive activity laws were intended to discourage tax-shelter investments, but their reach goes beyond tax shelters to cover all real estate investors and persons who invest in businesses as “silent partners” or who are not involved full time in the business. The passive activity rules prevent an investor from deducting what the law defines as a passive loss from salary, self-employment income, interest, dividends, sales of investment property, or retirement income. Such losses ...
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